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Report: Coronavirus outbreak may delay US$11B of nickel projects in Indonesia

The coronavirus outbreak in China may delay the development of about US$11 billion worth of nickel projects in Indonesia, Reuters reported Feb. 25, citing Luhut Pandjaitan, Indonesia's coordinating minister for maritime affairs and investment.

Projects in Morowali and Konawe on Sulawesi island and in Weda Bay in North Maluku will be impacted by Beijing's measures to curb the epidemic, the report said.

"It will have impacts on the projects and in turn affect exports that should have started this year," the minister was quoted as saying. "Some of them will be delayed by months."

The impact of falling supplies of machinery and raw materials from China to Indonesia is expected to materialize in March, the Jakarta Globe reported Feb. 24.

"The peak of the coronavirus outbreak was on Jan. 20-30. With one- to two-month lag, its full effect would be felt here in March," Susiwijono, secretary of the coordinating minister for economic affairs, told Antara news agency, the Jakarta Globe wrote.

"[A total of] 74% of our imports [from China] are raw materials and capital goods. They usually get replenished every one or two weeks. That's not going to happen [in the next few weeks]," Susiwijono was quoted as saying.

Several Chinese companies, including GEM Co. Ltd., Tsingshan Holding Group Co. Ltd. and Zhejiang Huayou Cobalt Co. Ltd., have announced plans to build nickel processing facilities in Indonesia as the Southeast Asian nation expedited a ban on nickel ore exports to January 2020 from January 2022 to boost development in the domestic processing sector.

Apart from nickel projects, Indonesia had been in talks with Chinese battery companies to build lithium battery plants in the West Java province.