Indonesia's Nickel Dominance Shakes Global Market

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Nickel,Indonesia,China

Indonesia's massive nickel production capacity and alleged environmental and labor concerns are impacting global nickel prices and the operations of international mining companies.

When the story of global nickel prices is written for 2024, Indonesia and China will undoubtedly be the main characters. This is not only due to the former country's high production output but also alleged violations of environmental rules and poor labor practices, which Indonesia has consistently denied. Indonesia is numero uno in global nickel production, accounting for 51% of the world's total mine production. The country also sits on 42% of total global reserves.

Because of this, it's been a major investment hub for Chinese firms. According to SandP Global Commodity Insights, Indonesia's nickel production is projected to hit 2.1 million metric tons in 2024, over 50% of the expected global output and more than double its 2020 levels. In the rest of the world, the nickel story has turned sour of late. Everywhere you look, mines and smelters are either closed or about to be. Adding to the woes is the fact that benchmark nickel prices remained down in 2024 from the highs of 2022. The Economist says most sector experts blame these problems on Indonesia because of its high nickel deposits, poor environment and labor laws and cheap coal power, a hot mix for those who want to undercut the competition. According to media reports, mining giant Vale is implementing job cuts across its global operations due to the continued decline in nickel prices. While the company has not revealed how many of its Sudbury, Ontario employees will be affected, it stated that the layoffs will mainly focus on 'non-operating roles.' Nickel is vital to various industries and applications. Despite its relatively low profile, nickel is highly versatile, which makes it an essential component in many modern technologies and products. For example, nickel is a key alloying element in stainless steel, which is used in construction, transportation and consumer goods

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