From Mines to Batteries: The Journey of Critical Metals in Every Electric Vehicle

Jakarta, INTI - Electric vehicles have emerged as a primary solution to reduce carbon emissions and combat climate change. A crucial component of electric vehicles is the battery, which relies on critical metals sourced from mines worldwide, including Indonesia. Downstream processing in the metal mining sector, particularly for nickel, copper, and cobalt, plays a vital role in the global supply chain for electric vehicle battery production.

Nickel: The Key Metal in Electric Vehicle Battery Production

Nickel is one of the main components of electric vehicle batteries, particularly in lithium-ion battery technology. Nickel enhances energy density, allowing electric vehicles to achieve longer ranges. As the country with the largest nickel reserves globally, Indonesia holds a strategic position in the global electric vehicle industry.

According to the Ministry of Energy and Mineral Resources (ESDM), Indonesia's nickel reserves amount to 21 million tons, representing 24% of the world's total nickel reserves. With the implementation of downstream processing policies, Indonesia is not only exporting raw nickel ore but also producing ferronickel and battery raw materials that hold significantly higher value.

Nickel Downstream Processing for Batteries: Building the Electric Vehicle Ecosystem

Nickel downstream processing is key for Indonesia to enter the global supply chain of the electric vehicle industry. The Indonesian government, through its downstream processing policies, has encouraged the construction of nickel smelters and battery manufacturing plants in various regions, such as Sulawesi and Maluku. One of the most prominent downstream processing projects is the Morowali Industrial Park, which has become Indonesia's largest battery raw material production hub.

The government aims for Indonesia to become the world's largest electric vehicle battery producer by 2030. According to a BloombergNEF report, the electric vehicle battery market is projected to reach USD 116 billion by 2030, and Indonesia has the potential to capture a significant market share through its downstream processing policies.

From Mines to Batteries: A Complex Process that Adds Value

The downstream processing of nickel for electric vehicle batteries involves several stages. First, the mined nickel ore undergoes purification at smelters to produce ferronickel or nickel matte. Subsequently, this product is further processed into battery raw materials, such as nickel sulfate or lithium nickel cobalt aluminum oxide (NCA) used in lithium-ion batteries.

With downstream processing, the added value of nickel products increases significantly. While the price of raw nickel ore ranges from USD 40-50 per ton, downstream processed products like nickel sulfate can fetch thousands of dollars per ton. This scenario makes downstream processing a solution for Indonesia to boost state revenue from the mining sector.

Cobalt and Copper: Other Essential Metals in Batteries

In addition to nickel, electric vehicle batteries also require other metals like cobalt and copper. Cobalt is used to enhance battery stability and safety, while copper is crucial for vehicle electrical systems. Although Indonesia's cobalt reserves are not as substantial as its nickel reserves, the country still has significant potential to develop cobalt and copper downstream processing industries.

Data from the International Energy Agency (IEA) indicates that global demand for cobalt and copper in the electric vehicle industry is projected to grow by 15% annually. This presents a significant opportunity for Indonesia to expand its mining downstream processing sector, not only for nickel but also for other critical metals.

The Future of Electric Vehicles and Indonesia's Role in the Global Supply Chain

By continuing to drive downstream processing, Indonesia has a significant opportunity to become a major player in the global electric vehicle industry. Furthermore, downstream processing allows Indonesia to diversify its economy, reduce dependence on raw material exports, and create new jobs in the manufacturing and high-tech sectors.

However, to achieve these goals, Indonesia needs to enhance investments in processing infrastructure, ensure environmental sustainability, and build partnerships with global companies in the battery and electric vehicle industries.

Downstream processing of critical metals such as nickel, cobalt, and copper is essential for Indonesia to integrate into the global electric vehicle supply chain. With downstream processing, Indonesia can not only increase the added value of its mineral products but also play a crucial role in supporting the growth of the electric vehicle industry worldwide.