Nearly a month after floating the idea of a so-called “OPEC for nickel,” Indonesia, the world’s largest nickel producer, is now recruiting Canada (the sixth-largest) for membership.
What happened: Indonesia’s Investment Minister Bahlil Lahadalia met with Canada’s Trade Minister Mary Ng at the G20 summit to discuss forming a cartel of nickel-rich countries (similar to the OPEC oil cartel), that would control its production and set market prices.
- OPEC nations control ~50% of oil supplies and ~90% of reserves. By regulating how much oil it sends out into the world, it's able (to an extent) to control global prices.
- In theory, a nickel cartel would work the same way. Indonesia would take on Saudi Arabia’s role as the ringleader and ring together the world’s biggest nickel producers.
Why it matters: As demand for nickel increases amidst the global EV push, Canada is striving to shape how the nickel mining industry operates while also positioning itself to reap the full economic benefits of its own supply—a cartel is one way of doing that.
- Though nickel is sitting at its highest price in over six months, the stability that comes from price control is verrrry attractive, given how volatile the market has been.
What’s next: The federal government’s critical minerals strategy will be published by year’s end and could give us a clearer idea of how seriously Canada will take Indonesia’s proposal.