JAKARTA, RAKYAT NEWS – The potential shutdown of PT Gunbuster Nickel Industry (PT GNI), one of Indonesia’s largest nickel smelters, has sparked calls for an immediate moratorium on new smelter projects. Located in North Morowali, Central Sulawesi, PT GNI has significantly reduced production and faces possible closure following the bankruptcy of its Chinese parent company, Jiangsu Delong Nickel Industry Co Ltd, a major stainless steel producer.

According to Bhima Yudistira, Director of the Center of Economic and Law Studies (CELIOS), the situation highlights a mismatch between the ease of obtaining smelter permits and the readiness of mineral supply chains. He emphasized that Indonesia, as a critical mineral producer, must implement a moratorium to better control supply and stabilize international prices.

Yudistira argued that a moratorium would provide an opportunity to thoroughly evaluate existing policies in the mineral supply chain. He pointed out that low nickel prices, underdeveloped midstream industries, and high environmental risks have weakened Indonesia’s bargaining power in global markets, particularly with buyers in the stainless steel and electric vehicle industries.

The call for a moratorium also includes stricter environmental standards and a halt to the construction of new coal-fired power plants in industrial areas. Yudistira stressed the importance of sustainable industrialization and stronger cooperation among mineral-producing countries to ensure better governance and environmental protection.

MIND ID, Indonesia’s state-owned mining holding company, has also raised concerns about oversupply in the nickel industry. Hendi Prio Santoso, MIND ID’s Director, noted that the oversupply of products like ferronickel and nickel pig iron (NPI) has driven prices down to levels that barely cover production costs, making the industry unsustainable.

The Indonesian Nickel Miners Association (APNI) revealed that most nickel smelters in Indonesia are foreign-owned, with PT Antam being the only major domestic player. Foreign companies, primarily from China, dominate the sector, raising concerns about the long-term benefits for Indonesia’s economy and locals

Several foreign-owned smelters operate in Indonesia, including PT Indonesia Morowali Industrial Park (IMIP), PT Weda Bay Industrial Park (IWIP), and PT Virtue Dragon Nickel Industry (VDNI). These facilities have significantly expanded Indonesia’s nickel processing capacity but have also contributed to oversupply and environmental challenges.

As Indonesia grapples with the complexities of its nickel industry, stakeholders are urging the government to adopt a more strategic approach. A moratorium on new smelters, coupled with stricter environmental regulations and better governance, could help balance supply and demand while ensuring sustainable growth in the sector. The future of Indonesia’s nickel industry will depend on its ability to address these challenges and maximize the benefits of its vast mineral resources. (Uki Ruknuddin)