Indonesian nickel shutdown to cut sulphur/acid demand

Four Chinese-operated nickel plants at the Indonesian Morowali Industrial Park have temporarily ceased operations following a fatal landslide in February, in a development that will significantly reduce regional demand for sulphur and sulphuric acid. The shutdowns affect facilities run by China’s GEM Co. and its partners, which together account for 30% of Indonesia’s high-pressure acid leaching (HPAL) capacity. The move comes amid heightened regulatory scrutiny. The largest of the four plants, PT QMB New Energy Materials, could remain offline for up to three months.

The production halt will lead to a sharp reduction in the consumption of sulphuric acid, a key reagent in the HPAL process. PT QMB New Energy Materials has an annual acid requirement of 1.5 million t/a. The other three affected plants, PT ESG New Energy Material, PT Meiming New Energy Material, and PT Green Eco Nickel, consume 653,000 t/a, 620,000 t/a, and 530,000 t/a acid, respectively. Collectively, this is expected to remove around 260,000 tonnes of monthly acid demand from the market. Consequently, this will reduce upstream sulphur demand by an estimated 50,000 tonnes per month for the duration of the shutdown.