The government is aiming for around $95 billion investment this year and will continue to focus on natural resources processing industries but wants to save its nickel reserves, the world's largest, for higher valued products such as materials that go into electric vehicle batteries.
Since banning nickel ore exports in 2020, Indonesia has seen a surge in investment into smelters but most output is ferronickel or nickel pig iron , used in stainless steel, that typically only contains 30% to 40% of nickel. Investment Minister Bahlil Lahadalia said the government will no longer provide tax holidays for investment into NPI.
"Downstreaming must at least reach 60% to 70% nickel content in Indonesia and not only for intermediate products," Bahlil said in an interview with Reuters. "NPI investment can reach break even in four to five years, why would we give 10-year tax holidays? That is not fair," he added.