JAKARTA, May 25 (Reuters) – Indonesia is considering imposing an export tax on low content nickel products to encourage downstream investments, the country’s investment minister said on Wednesday in an online press conference.
Indonesia, once a major nickel ore exporter, has stopped shipments of unprocessed nickel since 2020. While that has succeeded in attracting investment from major Chinese metal companies, the processing industry remains dominated by low-nickel content products such as nickel pig iron or ferronickel.
Investment Minister Bahlil Lahadalia said the government was considering whether it was necessary to impose more export restrictions to encourage domestic processing and production of higher-nickel content products.
“If we are forced to send products with content below 50%-60%…we will consider adding export tax,” Bahlil said in an online briefing from the sidelines of World Economic Forum in Davos, where he said he was meeting with potential investors.
However, no concrete action has yet been taken by the government on the tax rate policy, he added.
Indonesia is keen to take advantage of its rich nickel resources to establish a full supply chain for electric vehicles, from extracting nickel chemicals to producing batteries and eventually assembling electric cars.
South Korean companies are investing billions of dollars into battery and automotive plants in Indonesia and the government is trying to attract Tesla to invest in a facility in Indonesia.
Indonesia also plans to ban exports of unprocessed bauxite and tin as a potential driver of investment.
(Reporting by Stefanno Sulaiman Editing by Fransiska Nangoy and Kirsten Donovan)
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