Hanoi (VNA) – The Indonesian Government is optimistic that nickel prices will be kept stable near current levels in the future, as new plants in the world’s biggest producer offset rising demand and keep the market well supplied, according to Bloomberg.

Septian Hario Seto, Deputy Minister of the Coordinating Ministry for Maritime and Investment Affairs of Indonesia, was quoted as saying that the London Metal Exchange should hold around 15,000 USD to 16,000 USD per tonne in the short to medium term.

Seto said at the Fastmarkets International Critical Minerals and Metals Summit that an additional 928,000 tonnes a year of capacity is set to come online within the next three years, most of which will produce nickel for electric vehicles, adding that with this capacity expansion alone, it will be enough,

Indonesia’s production has surged to more than half of global output in recent years, causing prices to plunge and forcing producers elsewhere to shut down. That’s despite growing demand for the metal from the electric vehicle sector, which uses it in high-performance batteries.

However, the Southeast Asian country may face problems with its ore supply in the near future due to the breakneck pace of its mining expansion, which has led to a decline in its nickel content. The Indonesian Government will convene the industry to discuss concerns around the supply of limonite, a form of ore that is typically processed by high-pressure acid leaching plants into battery grade nickel, Seto said.

The country is also considering tweaks to its policy of providing tax holi꧋days to nickel projects, which has been a major incentive for foreign companies to build plants in the country, as Indon𒁃esia prepares to implement the global minimum corporate tax rate of 15%, said the official, adding that one option will be extending existing tax holidays but at an increased rate./.