The media first widely warned on April 26, 2022 that Indonesia's nickel reserves, as well as other important global nickel reserves, were about to be depleted.
Last week, the Indonesian Directorate General of Minerals and Coal (ESDM) once again warned that the country’s nickel reserves were dwindling and emphasised the importance of intensive exploration for new nickel and other raw material deposits. Otherwise, the downstream programme initiated by the government could not be adequately supported.
The media first widely warned on April 26, 2022 that Indonesia's nickel reserves, as well as other important global nickel reserves, were about to be depleted.
As a result, the Indonesian government was forced to admit on 12 May 2022 that the country’s nickel reserves, which had previously seemed infinite, were finite and that the known high-grade nickel reserves could be used up by 2031 and the low-grade nickel reserves by 2036.
Indonesian government without a nickel strategy?
The mining intensity with which Indonesia is exploiting its nickel reserves has led to the reserves being depleted ever faster. For some time now, the Indonesian government has been trying to curb overexploitation. Recently, warnings of the end of Indonesian nickel reserves have increased significantly.
Western stainless steel mills are dominated by multinational corporations based in Europe. Especially in the United States, the dominance of the European stainless steel oligopoly is unmistakable. As a result, the clamor among US mills for more market protection is almost identical to that of the corporate parents in Europe.
The clamor of the corporations is unfortunately a very successful political model that has already led to economically damaging overprotection in the EU and has already stifled parts of the downstream industry. Presumably, tens of thousands of jobs in the stainless steel downstream industry are on the brink or have already been lost.
Because what applies in the EU also applies in the United States: Imports of stainless steel are necessary because domestic mills have been unable to meet demand in their protected markets for years. In June 2024, for example, the EU Joint Research Center stated that the European industry has had to cover at least 25% of its stainless steel requirements with imports for years. Background: lack of production capacity. Imports also help to combat inflation and prevent price monopolies.
While the cries of Western stainless steel mills for more market protection have been dominated over the years by low prices from Asia, they have now turned their attention to stainless steel, which is supposedly so CO2-intensive. At the same time, manufacturers are increasingly importing the evil nickel pig iron into their protected markets – the alleged main reason for the high CO2 emissions in stainless steel production.
In the United States in particular, attempts are being made to distract from the associated Scope 3 emissions and to present themselves as clean EAF mills by referring to low Scope 1 and 2 emissions. When the question of the level of Scope 3 emissions is raised, it suddenly seems that some people no longer know what or how high they are.
This obfuscation tactic could also be observed again recently at the OECD Ministerial Meeting of the Global Forum on Steel Excess Capacity. Traditionally, the OECD attacks the expansion of Asian steel production capacities and hardly criticizes its own member states and especially the European Union.
The OECD has been criticized for years for keeping production capacities that have long since been shut down, mothballed or scrapped in its statistics. This makes it easier to pick on overcapacities in other countries and condemn the construction of new blast furnaces (outside its own member states). While the OECD does not really get around to implementing its own climate targets.
According to a Reuters analysis of data from the Global Energy Monitor (GEM), 18 electric arc furnaces (EAF) with a total additional capacity of 18 million tons are currently under construction in China. Most are replacing higher-carbon plants, including blast furnaces. Two of them are fully powered by solar cells.
To this end, China has taken measures to support its companies in relation to CBAM. The expansion of its carbon market to include steel and other raw materials, an increase in renewable energy capacity and rising scrap recycling rates.
But instead of Western stainless steel mills finally putting their own money where their mouth is to reduce CO2 emissions, here and elsewhere they prefer to wait for government aid and continue producing dirty steel.
And while Western stainless steel mills are screaming as loudly as possible for a level playing field, demanding more market protection and exemptions from measures such as CBAM for the import of raw materials and the export of finished products abroad, EBITDA results and dividend payouts have been secretly increased to record levels in recent years.
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