The ministry’s mining director general, Ridwan Djamaluddin, explained on Tuesday that the grand strategy also encompassed a nickel road map for the period of 2021 to 2045, which stipulated strategies for achieving goals, including ensuring the availability of reserves, improving purification processes and developing manufacturing capabilities.

With regard to reserves, Ridwan said the ministry planned to increase exploration and the conversion of nickel resources to reserves.

The government would also conduct an inventory of the low-grade limonite nickel ore reserves and of the higher-grade saprolite nickel ore reserves and simultaneously mine both types to reduce costs.

Meanwhile, to improve purification processes, the ministry aims to expedite the construction of hydrometallurgy factories and nickel sulfate factories. Categorized as a class 1 nickel type, nickel sulfate can be used as battery cell cathode material.

“We plan to limit ferronickel and nickel pig iron plants and push class 1 nickel production,” Ridwan told House of Representatives Commission VII overseeing energy and mineral resources during a working meeting in Jakarta.

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Class 1 types, such as nickel sulfate and mixed hydroxide precipitate (MHP), contain at least 99.8 percent nickel, while class 2 types, such as ferronickel and nickel pig iron, are of lower purity.

The GSKM is part of the government’s larger scheme to foster downstream industries for the production of finished goods. Processing raw materials into finished products was expected to boost nontax revenue from the mining industry from an average of Rp 40 trillion per year to Rp 1,000 trillion per year, said Ridwan.

“Nickel processing is projected to increase in value by four to five times,” he added.

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As for strategies to develop manufacturing, Ridwan said, the ministry planned to increase the domestic absorption of ferronickel and nickel pig iron by developing the stainless-steel industry and converting class 2 nickel into class 1 nickel.

The government is also pursuing import substitution for stainless-steel production and aims to develop the domestic nickel manganese cobalt (NMC) cathode industry and nickel-based battery cell industry to increase local content in electric vehicles.

Processing and Smelting Companies Association (AP3I) chairman Prihadi Santoso stressed the need for the government to provide clarity for investors, who were focused on legal certainty in Indonesia.

As of now, he said, Indonesia was moving in the direction of good governance and practice, which could be concluded from the passage of the Job Creation Law and the derivative regulations and draft regulations issued since.

“The goals can be achieved if [the government] is consistent in implementing the [necessary] measures,” he told The Jakarta Post on Wednesday.

Meanwhile, Reforminer Institute executive director Komaidi Notonegoro said the biggest challenge in developing the downstream nickel sector was the fact that Indonesia’s domestic market was not ready to absorb downstream nickel products.

He suggested a multisectoral approach involving the Industry Ministry to create scenarios based on various aspects, including whether or not downstream products could be sold in the domestic market. As of now, he said, the Industry Ministry had yet to draw up a roadmap to provide guidance for the industry.

“As long as [their] products are bought at fair prices, they will follow the rules,” he told the Post on Thursday.

The GSKM will contain an overview of the upstream and downstream industries and challenges, outlining key programs and work plans. Commodities to be included in the grand strategy are nickel and cobalt, iron, copper, gold and silver, tin, aluminum and coal.