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Nickel Trading
Understanding the Nickel Supply Chain in Indonesia
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Due to Indonesia's unique regulatory framework, mining production and trading licenses are held separately via different entities to regulate and control different aspects of the supply chain. This ensures transparency, accountability, and proper oversight. In this ecosystem, it is largely customary that the nickel producers sell to licensed traders, who then supply the over 44 nickel smelters in the country. This setup creates a very lucrative business case for being a trader within the world’s #1 nickel industry
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Lateritic nickel ore in Indonesia is priced by the government via the HPM pricing system. The HPM price sets the floor pricing allowed for nickel ore based on varying nickel percentages and humidity levels. To maintain a constant flow of ore, smelters provide a sizable premium above the HPM price. This premium not only entices producers to continue their production but also gives traders a strong incentive to source and deliver the nickel ore — effectively shielding both parties from depressed nickel prices while ensuring that smelters continue receiving the high-demand feed they require
1) Cutting out the Middleman
On average, traders earn more per metric tonne than producers.
This gives us the ability to purchase and sell our own nickel material directly to smelters – capturing both producer and trading margins.
2) Creating a Standalone Business Model
This license unlocks the ability to source nickel ore from any local or large-scale producer across Indonesia and sell it to the more than 49 operating nickel smelters in the country. Notably, over 14 of these smelters are located within 170 km of the PT Nusa Nickel head office.
3) Brokering the Intermediate Products
The trader license also allows us to broker highly sought-after intermediate products processed by various smelters. These include:
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Nickel Pig Iron (NPI) & Ferronickel: Widely used in stainless steel production
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Matte & Mixed Hydroxide Precipitate (MHP): Essential in the production of battery materials for electric vehicles
New Potential Revenue Streams
A New Subsidiary Created
Through our wholly owned subsidiary, PT Nusa Niaga Corp, we have secured the Mineral Transportation and Sales Permit (IPP Nickel Traders License) in Indonesia. This license provides the legal foundation for us to participate directly in the nickel trading business, complementing our production operations and expanding our commercial reach. It underscores our ability to navigate local regulatory frameworks and execute effectively on the ground. With this milestone achieved, we are positioned to broaden our revenue streams while advancing our long-term growth strategy in the world’s most important nickel district
Internal Trading Expertise
Our Indonesian executive team brings years of experience in nickel trading, having worked across the supply chain before moving into production. This expertise and network of established relationships provide us with a strong foundation to expand our trading operations effectively. Their knowledge not only strengthens our execution on the ground but also enhances our ability to navigate market dynamics and build lasting partnerships within Indonesia’s nickel sector
