PT Vale Indonesia Tbk (INCO) projects to generate revenues this year of AS$683.3 million, or an 11% decrease from the previous year's realization of AS$764.7 million.

The INCO 2020 annual report submitted to the Stock Exchange on Wednesday (31/3) explains that the low revenue target is in line with the project of declining in nickel matte sales and nickel in matte production volume this year.

Management estimates that matte nickel sales will reach 64,780 tons in 2021, or an 11% decrease from the previous year's realization of around 72,846 tons. The production volume target for nickel in matte also decreased by 11% to 64,083 tons from last year's 72,237 tons.

"Even though it was affected by the Covid-19 pandemic and experienced a decline in the first quarter of 2020, world nickel demand and prices began to move up at the beginning of the second quarter of 2020. The economic recovery in China has spurred this after the end of the lockdown period," wrote the management.

The increase in nickel demand was supported by the restart of infrastructure projects and technological development in China, including electric cars that were previously delayed and stopped.

"Therefore, the continued growth of nickel demand in the world market is an opportunity for the company to develop its business in the future," he added.

Energy research and consulting institute Wood Mackenzie estimates nickel demand growth of around 5% per year from around 750-kilo tons in 2019 to 980-kilo tons in 2025, and 2.11 million tonnes 2040. This growth is driven by estimates of nickel consumption in Li-batteries ions for electric vehicles and energy storage.