Future demand for critical metals will continue to grow, with Indonesia and other Southeast Asian countries holding significant development potential [WRI Indonesia Conference]

At the 2025 Indonesia Mining Conference & Critical Metals Conference - Nickel, Cobalt, and NEV Arena, Tobias Maya, President of PT Geo Search, shared insights on the topic of "The Rise of Mining in Southeast Asia: Indonesia at the Forefront of Global Critical Mineral Development, Supporting Renewable Energy Goals."

Critical Metals Required for 2050 Renewable Energy Targets

Indonesia's Global Mineral Production Rankings:

• Nickel: Indonesia is the world's largest nickel producer, with an annual production of 2.2 million mt, accounting for 60% of the global total.
• Cobalt: Indonesia is the world's second-largest cobalt producer, with an annual production of approximately 28,000 mt, accounting for 10% of the global total.
• Copper: Indonesia is the world's fifth-largest copper producer, with an annual production of approximately 1.1 million mt, accounting for 5% of the global total.
• Bauxite: Indonesia is the world's fifth-largest bauxite producer, with an annual production reaching 21 million mt, accounting for 20% of the global total.
• Manganese: Indonesia has a manganese resource potential of approximately 190 million mt, accounting for 3% of the world's known reserves and ranking seventh globally.

Key Cooperation and Investment Opportunities:

• Free Trade Agreement: Indonesia has signed a free trade agreement with Australia to supply 60,000 to 120,000 mt of lithium annually to the Indonesian EV market, supporting the development of the EV industry.
• Automaker Investments: Major global automakers, including Ford, Hyundai, LG, and Tesla, are making significant investments in EV battery and vehicle manufacturing.
• Market Outlook: Indonesia is expected to experience strong growth trends, with competitive operating costs and a series of government policies supporting investment.

Global Nickel Resource Estimates

Global Nickel Resource Estimates:

70% of the world's nickel resources are laterite ores, but they account for less than 40% of global ore production.

Global Distribution of Nickel Laterite Resources

Many nickel laterite deposits are located in tropical regions. Ophiolites exposed to millions of years of humid tropical climates have formed extensive and thick nickel laterite deposits.

Indonesia and the Philippines are rich in nickel laterite resources. These countries are close to China, India, Japan, and emerging countries in Southeast Asia, supporting the demand of the major steel industries and the growing EV industries in these regions.

Nickel Production in Southeast Asia - Early Exploration

In the 1980s and 1990s, Indonesia, through a centralized work contract system, contracted large areas to foreign and local mining companies for mineral development. These areas remain the primary sources of known mineral resources and nickel production in the region to this day.

The main companies involved in the development included Vale (formerly Inco) with mines in Sorowako, Weda Bay, Gag Island (BHP), Rio Tinto/Sherritt, and Antam.

This management system led to a high success rate in project development due to several factors: companies were granted large exploration areas; strict timetables compelled explorers to quickly identify the best areas; centralized control over permit issuance provided a clear and stable investment environment; companies had sufficient technical and financial capabilities; technology transfer was facilitated through the use of foreign technology; and projects were built based on long-term planning, enabling them to withstand price fluctuations.

Nickel Production in Southeast Asia - Key Periods in Development

In 2000, Indonesia implemented local autonomy and widely issued mining permits (KP and IUP). These permits were primarily held by domestic investors, although they were generally of relatively small scale, typically ranging from 100 to 2,000 hectares.

In 2003, as nickel prices began to rise, numerous opportunistic investors flooded the market.

In 2007, the investment bubble reached its peak, with nickel prices soaring to over $55,000 per mt, only to be followed by a rapid pullback due to the 2008 global financial crisis.

In 2009, a new mining law was introduced, establishing a five-year grace period to adapt to the new regulations.

In 2010, new IUP applications were suspended, and underperforming concessions were cleaned up through the CNC mechanism.

In 2014, Indonesia implemented a mineral export ban, resulting in slow progress for most planned smelter constructions.

In 2016, the Philippines imposed restrictions on its mining activities, further affecting nickel production in Southeast Asia.

Frequent Nickel Production Activities in Recent Years

In recent years, nickel production has shown a positive trend, particularly since the second half of 2016 and for most of the past decade, with significant increases in exploration, resource development, and production activities in Indonesia and the Philippines.

The main factors driving this trend include the relaxation of the export ban and the introduction of an export quota system (as of 2020); a substantial increase in investments by Chinese smelters in stainless steel production (RKEF/NPI) in Indonesia; rising domestic market demand; strong nickel price performance; growing demand for emerging battery-grade nickel/cobalt (HPAL process); and the application of new technologies, all of which have collectively contributed to the positive development of nickel production.

Since the second half of 2016, Indonesia has also made significant progress in downstream processing and refining activities, leading to a doubling of nickel metal production every two years.

Outlook for Nickel Production in Southeast Asia

1. Indonesia's nickel production will continue to grow significantly, driven by global investments that will extend into downstream stainless steel and EV battery markets.

2. Southeast Asian countries with abundant critical mineral resources (such as nickel, cobalt, copper, gold, and rare earths) and lower production costs will experience strong growth momentum.

3. The Philippines is striving to emulate Indonesia's recent investment growth, aiming to bring significant economic benefits by attracting foreign investment, creating jobs, enhancing skills, and supporting local enterprises.

4. Over the next five years, the increase in Indonesia's critical metal production is expected to impact the prices of direct shipping ore.

5. Effective social communication and environmental management are crucial for achieving future growth.

New Nickel Resource Development

While it is relatively easy to locate laterite nickel ore, accurately determining the grade of goethite and saprolite ores still requires the support of systematic exploration methods.

Unfortunately, most mining licenses in Indonesia have performed poorly in applying exploration techniques that comply with international standards and norms such as JORC and KCMI, making it challenging to provide reliable resource estimates.

However, this lack of geological understanding and mine planning also creates significant opportunities for discovering previously overlooked new resources.

Companies are currently increasing their investments in sustainable mining practices (green mining).

How to Find the Best Nickel Laterite Deposits?

First, it is necessary to understand the formation process of ferronickel laterite ores. Ferronickel laterite ores are primarily formed from ophiolites through long-term weathering and leaching. Tropical regions with high rainfall provide an ideal environment for the formation of laterite ores, as abundant rainfall aids in the weathering of rocks. When searching for weathered soft rocks containing nickel silicates, focusing on areas with high rainfall and suitable geological conditions will greatly increase the likelihood of discovering high-grade nickel laterite deposits.

Nickel Exploration Strategies

Typical laterite weathering profiles contain goethite and saprolite, with grade ranges serving as indicators of indicative minerals.

UltraGPR is an efficient exploration tool capable of identifying lithological contacts between goethite (clay-rich) and saprolite (weathered rock) within laterite weathering profiles, reaching down to the base of the weathering profile (bedrock). This technology often provides estimates of the potential total volume of goethite and weathered rock within the surveyed area.

By integrating drilling data, UltraGPR can more accurately estimate the size and mineralization distribution of nickel and iron laterite ore bodies, thereby enhancing the precision of resource estimation.

Regional Geology and GIS Studies

Ideally, deposit exploration should commence with regional geological studies and GIS (Geographic Information System) technology. This is particularly true in Southeast Asia, where such laterite deposits are relatively easy to discover. They typically occur in areas where ophiolitic structures have been uplifted and weathered over time.

The distribution of laterite deposits can be predicted through slope analysis and overall landform morphology analysis. In areas with gentle to moderate slopes (ranging from 0° to 18°), where the bedrock is ultramafic rock, it often favors the enrichment of laterite nickel ore. In contrast, in moderately to steeply hilly areas (with slopes ranging from 18° to 35°), although the bedrock is also ultramafic rock, laterite mineralization is typically thinner and more irregularly distributed.

Simplified Example: Formation of Ferronickel Laterite Deposits in Ophiolites of Indonesia

Highly weathered laterite layers are often controlled by geological structures, which helps in locating the thickest and highest-grade goethite and soft rock deposits. These deposits are usually revealed through topographic surface relief.

UltraGPR Results

Core Drilling and Sampling

After preliminary mapping and UltraGPR surveys have identified the weathering crust zones, infill drilling can be targeted at specific geological structures. This allows drilling to be conducted in the optimal locations, targeting the best weathering crust zones. This approach can save up to 40% of the high costs associated with drilling and sampling.

Additionally, completing the drilling phase more rapidly offers further advantages, significantly shortening project timelines and enabling faster achievement of mineral resource milestones.

Future Exploration Targets

In the future, the demand for critical metals will continue to grow, with Indonesia and other Southeast Asian countries playing a pivotal role in this process. These countries possess significant potential for developing new resources:

The discovery of next-generation projects will include deposits that are currently less conspicuous.

If exploration is encouraged as it was in the past, it is almost certain that new nickel, copper, cobalt, and other critical metal deposits will be discovered.

Despite challenges posed by project logistics, infrastructure, and land-use conflicts, these countries offer immense opportunities for developing mineral resources.

Mining these critical metals will help ensure a smooth transition to a new era of renewable energy in the region.

Overall, the possibilities for future exploration are extensive.

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