Indonesia is currently deliberating significant reductions to its nickel mining quotas, potentially lowering them to 150 million tons in 2025 from 272 million tons in 2024. These discussions are taking place within the Energy and Mineral Resources Ministry, as the government seeks to address the declining global nickel prices, which fell by 45% in 2023 and have yet to recover in 2024. President Prabowo Subianto, who assumed office in October 2024, is expected to shift policies from the previous administration's approach that encouraged local smelting operations. [5265442e]
The proposed cuts may face resistance from the finance and investment ministries, primarily due to concerns over the impact on tax revenues. Indonesia, which produces over half of the world's nickel, is grappling with challenges as Chinese-owned smelters in the country struggle with high ore prices. The government aims to preserve its depleting nickel reserves, especially as ore grades continue to decline. [5265442e]
In tandem with these developments, President Prabowo is also advancing Indonesia's broader energy transition strategy, which includes a commitment to phase out coal and fossil fuels by 2039. This ambitious plan, announced during the G20 Summit in November 2024, is part of Indonesia's goal to achieve net-zero emissions by 2050. As the country navigates these complex energy and economic landscapes, the balance between resource management and market stability remains a critical focus. [d85867cf]
The government's strategy includes a tenfold expansion of renewable energy capacity, aiming for an annual increase of 5 to 7 gigawatts by 2030. However, the complexities of transitioning from fossil fuels while managing key mineral resources like nickel present significant challenges. [3d545c71]