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How Indonesia Became the World’s Largest Processed Nickel Producer

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Indonesia’s Rise as a Global Nickel Powerhouse

Indonesia has transformed its nickel industry over the past decade, becoming the world’s largest producer of processed nickel. This remarkable growth has positioned the Southeast Asian nation as a major player in global mineral supply chains, particularly those supporting stainless steel manufacturing and electric vehicle (EV) batteries.

According to Our World in Data, Indonesia overtook China in processed nickel production in 2021, marking a significant shift in the global nickel industry.

But how did Indonesia achieve this transformation, and what does it mean for the country’s economy and the future of clean energy?

How Indonesia Became the World’s Largest Processed Nickel Producer

Indonesia’s nickel industry has experienced extraordinary growth.

In 2014, the country produced approximately 22,000 tonnes of processed nickel, representing around 1% of global production.

By 2023, annual production had exceeded 1.4 million tonnes, accounting for approximately 41% of the global total.

This represents an increase of more than 60 times in less than a decade.

Indonesia’s success is largely attributed to its abundant nickel reserves, government industrial policies, and substantial foreign investment in domestic processing facilities.

Rather than remaining primarily an exporter of raw nickel ore, Indonesia has developed a rapidly expanding domestic nickel processing industry.

This transformation has strengthened its position in international mineral markets.

The Role of Indonesia’s Nickel Export Ban

One of the most important factors behind Indonesia’s nickel industry growth has been its policy of restricting raw nickel exports.

Historically, Indonesia exported large quantities of nickel ore to countries such as China, where the material was processed into higher-value products.

To encourage domestic industrial development, the Indonesian government introduced restrictions on raw nickel exports, including a comprehensive export ban implemented in 2020.

The policy aimed to encourage mining companies and foreign investors to establish processing facilities within Indonesia.

As a result, the country attracted substantial investment in nickel smelters, refineries, and related industrial infrastructure.

By processing more nickel domestically, Indonesia has sought to capture a greater share of the economic value generated by its natural resources.

However, the export restrictions have also generated international trade disputes, particularly with the European Union.

China’s Important Role in Indonesia’s Nickel Industry

Although Indonesia has become the world’s largest location for processed nickel production, Chinese companies have played a major role in this expansion.

Chinese investors have financed and developed numerous nickel processing facilities across Indonesia.

Their investments have helped introduce processing technology, expand industrial infrastructure, and increase production capacity.

According to the International Energy Agency (IEA), Chinese companies hold a substantial ownership stake in Indonesia’s nickel refining industry.

This highlights an important distinction: Indonesia leads the world in nickel processing by production location, but ownership and control of its processing facilities extend beyond Indonesian companies.

Foreign investment has accelerated industrial development, while also raising questions about how much economic value Indonesia can retain domestically over the long term.

Why Indonesia’s Nickel Production Matters for Electric Vehicles

Nickel is an important raw material used in stainless steel manufacturing and certain types of lithium-ion batteries.

As electric vehicle adoption increases, nickel has become a strategically important mineral for automakers and battery manufacturers.

Indonesia’s expanding nickel industry has attracted interest from companies seeking reliable supplies of battery materials.

However, not all processed nickel can be used directly in EV batteries.

A significant portion of Indonesia’s nickel production consists of nickel pig iron and ferronickel, which are primarily used in stainless steel production.

Producing battery-grade nickel requires additional refining and processing.

Indonesia has been expanding its capacity to produce nickel intermediates suitable for further conversion into battery materials.

These developments could strengthen the country’s role in global EV battery supply chains.

Nevertheless, demand for nickel in electric vehicles will also depend on battery technology, particularly the growing adoption of lithium iron phosphate (LFP) batteries, which do not require nickel.

Environmental Challenges Facing Indonesia’s Nickel Industry

Despite its economic importance, Indonesia’s nickel industry faces significant environmental challenges.

Nickel mining and processing can contribute to deforestation, water pollution, greenhouse gas emissions, and habitat destruction.

Many Indonesian nickel processing facilities rely on coal-generated electricity, increasing the carbon footprint of nickel production.

These environmental concerns are particularly relevant for electric vehicle manufacturers seeking to reduce emissions throughout their supply chains.

Improving environmental standards, increasing renewable energy use, and strengthening mining regulations will be important for the industry’s long-term sustainability.

Balancing economic growth with environmental protection remains a central challenge for Indonesia.

What Is the Future of Indonesia’s Nickel Industry?

Indonesia’s emergence as the world’s largest processed nickel producer represents a major transformation of its industrial economy.

The country has moved beyond exporting raw minerals toward developing domestic processing capabilities and attracting international investment.

Looking ahead, Indonesia has opportunities to expand further into battery materials, electric vehicle manufacturing, and other higher-value industrial activities.

However, its long-term success will depend on several factors, including technological development, environmental performance, global nickel prices, and changing battery technologies.

Developing domestic expertise and increasing local participation in the industry could also help Indonesia capture more economic benefits from its mineral resources.

Conclusion

Indonesia’s rise to become the world’s largest processed nickel producer demonstrates how natural resources, industrial policy, and foreign investment can reshape a country’s position in global supply chains.

Its dramatic production growth has made Indonesia an important supplier of nickel for stainless steel manufacturing and the expanding electric vehicle industry.

However, the country’s future in the global nickel market will depend on more than production volume alone.

#CriticalMinerals Supply Gap: Why #Lithium, #Nickel, #Cobalt and #Copper Nameplate Capacity May Be Misleading

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Mining capacity may overstate real critical mineral supply. Here’s why lithium, nickel, cobalt and copper face growing production, processing and geopolitical risks.

The world may have considerably more critical-mineral capacity on paper than it can actually depend on.

That distinction matters as electric vehicles, renewable energy, power grids, battery storage, artificial intelligence, data centers and defense industries compete for growing quantities of lithium, nickel, cobalt and copper.

A recent analysis highlighted by MINING.COM warns that assessments based on nameplate capacity—the maximum production a mine or processing facility is designed to achieve—can create an overly optimistic picture of mineral availability.

The problem is simple: theoretical capacity isn’t the same as actual production.

Why Nameplate Capacity Can Be Misleading

Mines and processing facilities rarely operate continuously at maximum capacity. Maintenance, declining ore grades, power interruptions, labor shortages, water constraints, processing bottlenecks and technical problems can all reduce output.

A facility designed to produce one million tonnes annually may produce considerably less if utilization reaches only 70% or 80%.

The International Energy Agency (IEA) recognizes this distinction. In its Energy Technology Perspectives 2026 analysis, the IEA uses an 85% nameplate-capacity assumption for certain production outside China rather than assuming facilities operate at 100%.

This suggests investors and policymakers should focus on dependable production, not simply installed capacity.

Lithium: Rapid Demand Growth

Lithium demonstrates how quickly an apparently comfortable market can tighten.

Massive investment in mines and processing capacity has increased global lithium supply. But electric vehicles and battery storage are also driving extraordinary demand growth.

The IEA has projected lithium demand to increase dramatically through 2040. Its earlier analysis also indicated that announced mining projects could leave a substantial gap between expected supply and projected 2035 requirements.

Lithium also illustrates why mine production alone isn’t enough.

Lithium-bearing material must be converted into products such as lithium carbonate or hydroxide, achieve the required purity and qualify for battery manufacturing.

A lithium resource underground is therefore not equivalent to battery-grade material available to manufacturers.

Nickel: Abundant but Highly Concentrated

Nickel presents a different risk.

Indonesia’s rapid production expansion has transformed the global nickel market and contributed to abundant supply. According to U.S. Geological Survey data, Indonesia accounted for approximately 62% of global mined nickel production in 2024.

But abundance has come with increasing geographic concentration.

The IEA estimated that the top three nickel-producing countries represented about 77% of mining production in 2024, with that share potentially reaching approximately 84% by 2040.

This creates an unusual situation: the world can have plenty of nickel while remaining heavily dependent on one major production center.

The IEA’s Nickel Stress Test

The vulnerability becomes clearer under the IEA’s N-1 stress test, which examines what happens if the largest supplier is removed.

For nickel, that supplier is Indonesia.

In the IEA’s 2035 analysis, removing the largest supplier leaves remaining nickel supply covering less than 55% of corresponding remaining demand.

That is a striking result.

Nickel can appear adequately supplied globally yet become severely constrained if production from its dominant supplier is disrupted.

There is another complication: not all nickel is interchangeable.

Stainless steel, batteries, aerospace components and superalloys require different products and processing routes. Large headline production numbers therefore don’t necessarily indicate how much suitable battery-grade or specialty nickel is available.

Cobalt: Concentration at Multiple Stages

Cobalt faces another concentration problem.

The Democratic Republic of the Congo has historically dominated global cobalt mining, while China plays a major role in downstream processing.

This creates vulnerabilities at multiple stages.

Even when global mine capacity appears sufficient, manufacturers remain exposed to disruptions involving extraction, refining or international trade.

The IEA’s N-1 analysis found that after removing the largest supplier, remaining cobalt supply would cover only about 65% of corresponding demand in its 2035 assessment.

Cobalt demonstrates why mineral security must be evaluated across the entire supply chain rather than by counting tonnes in the ground.

Copper: The Structutral Supply Challenges

Copper may present the biggest structural challenge.

It is essential for power grids, electric vehicles, renewable energy, buildings, industrial machinery, data centers and AI infrastructure.

Unlike some battery minerals, copper already serves an enormous existing global market.

The IEA has warned that expected supply from announced mining projects could leave a substantial gap against projected copper requirements during the 2030s.

Closing that gap isn’t easy.

Ore grades are declining in many regions, major discoveries are difficult to develop, capital costs are high and new mines can require more than a decade to progress from discovery through permitting and construction.

That makes copper supply particularly difficult to expand quickly.

Four Minerals, Four Different Risks

Lithium, nickel, cobalt and copper reveal different weaknesses in the global critical-minerals system.

Lithium faces exceptionally rapid demand growth.

Nickel faces extreme geographic concentration despite abundant global production.

Cobalt faces concentrated mining and processing.

Copper faces the possibility of a significant structural supply gap as electrification accelerates.

Together, they demonstrate why nameplate capacity alone is an inadequate measure of mineral security.

Mining Is Only the Begining

Critical-mineral supply chains extend far beyond the mine:

Mine → Concentrator → Smelter → Refinery → Chemical Processing → Manufacturing

Every stage can become a bottleneck.

A country might possess large mineral resources but depend on another nation for refining. Likewise, sufficient global mine production doesn’t guarantee manufacturers can obtain material of the required purity and specification.

Processing concentration may actually represent one of the greatest vulnerabilities.

Recent IEA analysis has emphasized that mineral refining remains highly concentrated, with dominant suppliers accounting for much of the industry’s recent production growth.

Global capacity can therefore increase while the supply chain simultaneously becomes less diversified.

A Better Measure of Mineral Security

Traditional forecasts often compare:

Projected Demand vs. Projected Capacity

A more realistic framework is:

Secure Supply = Operating Capacity × Utilization × Processing Availability × Product Suitability × Geographic Diversification × Supply-Chain Reliability

That produces a very different picture.

A mine operating at 60% capacity cannot reliably be counted at 100%. Nickel unsuitable for a particular downstream application cannot automatically satisfy that customer’s requirements. And a market overwhelmingly dependent on one country remains vulnerable even when global supply exceeds demand.

Bottom Line

The critical-minerals challenge isn’t simply about finding more resources.

Lithium faces rapid demand growth. Nickel faces geographic concentration. Cobalt faces concentrated mining and processing. Copper faces a potentially serious structural supply challenge.

The solution requires more than building mines. Governments and industry need dependable production, diversified processing, recycling infrastructure and resilient mine-to-market supply chains.

Nickel makes the distinction particularly clear. Indonesia’s extraordinary expansion has increased global supply, but the IEA’s finding that remaining nickel supply would cover less than 55% of remaining demand in a 2035 disruption scenario demonstrates how quickly apparent abundance can become vulnerability.

Ultimately, the critical-minerals race won’t be determined simply by who has the largest resources.

It will depend on who can reliably mine, process and deliver the right materials when they are needed.

Because in critical minerals, capacity on paper is not the same as secure supply.

Sources: International Energy Agency (IEA), Global Critical Minerals Outlook 2025 and 2026 and Energy Technology Perspectives 2026; U.S. Geological Survey (USGS) mineral statistics; MINING.COM, Mining’s Nameplate Capacity Hides a Critical Mineral Threat: Study.

Disclaimer: This article is for informational purposes only advice. Mineral supply, demand and project-development forecasts are inherently uncertain.

China Seeks Stable Mineral Rules from Indonesia

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Indonesia has become one of the world’s most influential producers of critical minerals, particularly nickel, which plays a vital role in electric vehicle (EV) batteries and stainless steel production. As global demand for battery materials continues to rise, the country has attracted billions of dollars in mining and downstream processing investments.

Among the largest investors is China, whose mining and manufacturing companies have established a significant presence in Indonesia’s mineral sector. Recently, China has emphasized the importance of stable and transparent mineral regulations, highlighting a growing concern shared across the global mining industry.

The discussion goes beyond diplomacy—it reflects the increasing importance of regulatory certainty in securing long-term investments and maintaining resilient global supply chains.

Why Regulatory Stability Matters in Mining

Mining projects require substantial upfront investments and often take years before reaching commercial production. Companies planning billion-dollar projects need confidence that government policies will remain predictable throughout the life of a mine.

Stable mineral regulations help companies:

  • Plan long-term investments
  • Secure financing from banks and investors
  • Manage operational risks
  • Forecast production costs
  • Maintain reliable supply agreements

When mining regulations frequently change, companies may delay expansion projects or reconsider future investments.

Indonesia’s Strategic Position in Critical Minerals

Indonesia possesses some of the world’s largest nickel reserves and has transformed itself from a raw ore exporter into a global hub for mineral processing.

Government policies encouraging domestic refining have attracted investments in:

  • Nickel smelters
  • Battery material manufacturing
  • Electric vehicle supply chains
  • Industrial processing facilities

These initiatives have strengthened Indonesia’s role as a key supplier of materials essential for clean energy technologies.

China’s Interest in Transparent Mineral Policies

Chinese companies have invested heavily across Indonesia’s mining sector, particularly in nickel processing and battery materials.

As these investments continue to grow, businesses are seeking greater clarity regarding:

  • Mining permits
  • Production quotas
  • Royalty structures
  • Export regulations
  • Environmental compliance requirements
  • Tax policies

Predictable regulations reduce uncertainty and encourage continued investment in large-scale mining projects.

Impact on the Global EV Battery Supply Chain

Indonesia’s mining policies influence much more than domestic production.

Nickel produced and processed in Indonesia is used throughout global manufacturing industries, including:

  • Electric vehicle batteries
  • Renewable energy storage
  • Consumer electronics
  • Stainless steel manufacturing
  • Industrial infrastructure

Changes in production policies or export regulations can affect supply chains, commodity prices, and investment decisions worldwide.

Why Transparency Benefits Everyone

Transparent mining regulations create advantages for governments, investors, and local communities alike.

Benefits include:

For Governments

  • Increased foreign investment
  • Higher long-term tax revenues
  • Improved regulatory compliance
  • Sustainable economic development

For Mining Companies

  • Reduced investment risk
  • Greater project certainty
  • Easier access to financing
  • Improved operational planning

For Global Markets

  • More reliable mineral supplies
  • Stable commodity markets
  • Stronger battery manufacturing ecosystem
  • Greater confidence in long-term supply chains

The Future of Indonesia’s Mining Industry

As demand for critical minerals accelerates, countries rich in natural resources will compete not only through geology but also through governance.

Investors increasingly evaluate:

  • Regulatory consistency
  • Transparent permitting processes
  • Environmental standards
  • Infrastructure development
  • Investment protection

Indonesia’s ability to maintain an attractive investment climate while safeguarding national interests will shape its position in the global mining industry for years to come.

Final Thoughts

The conversation surrounding stable mineral regulations reflects a broader trend across the global mining sector. Investors are looking beyond resource availability and placing greater emphasis on predictable policies, transparent governance, and long-term regulatory certainty.

For Indonesia, maintaining this balance will be essential to attracting continued investment while supporting national economic development.

As the world transitions toward cleaner energy technologies, stable mineral policies will remain a critical factor in ensuring resilient supply chains and sustainable growth across the global critical minerals industry.

PM #Modi’s #Indonesia Tour: Securing #India’s #Nickel Future

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PM Modi's Indonesia visit promotional graphic highlighting the rise of nickel diplomacy, emphasizing its role in powering India's clean energy future.

Prime Minister Narendra Modi’s visit to Indonesia marks more than another high-level diplomatic engagement—it represents a strategic opportunity to redefine India’s role in the Indo-Pacific through critical minerals, maritime cooperation, and resilient supply chains.

As the global race toward electric vehicles (EVs) and clean energy accelerates, access to critical minerals has become as important as access to energy itself. Among these minerals, nickel stands out as an indispensable component in lithium-ion batteries. With Indonesia possessing the world’s largest nickel reserves, the country has emerged as a pivotal player in the global clean energy ecosystem.

Why Indonesia Matters

Indonesia is not just India’s maritime neighbour; it is a strategic partner located at one of the world’s most critical maritime crossroads. The Malacca Strait, through which a significant share of global trade flows, connects directly to India’s security interests in the Andaman Sea.

The visit reflects India’s growing recognition that economic security, energy security, and maritime security are increasingly interconnected. By strengthening ties with Indonesia, India can simultaneously enhance regional stability while securing essential resources for its green transition.

The Case for “Nickel Diplomacy”

India’s ambitious targets for electric mobility, renewable energy, and battery manufacturing depend on stable supplies of critical minerals. However, much of Indonesia’s nickel processing industry has already attracted substantial foreign investment, particularly from Chinese companies that dominate downstream refining and manufacturing.

This creates both a challenge and an opportunity.

India now has a limited window to establish partnerships through:

  • Joint ventures in nickel mining and processing.
  • Investments in downstream battery material production.
  • Long-term supply agreements.
  • Technology collaboration in mineral processing.

Such initiatives could become the foundation of what may be termed “Nickel Diplomacy”—using strategic resource partnerships to strengthen both economic resilience and geopolitical influence.

Beyond Minerals: A Comprehensive Strategic Partnership

While critical minerals dominate the economic agenda, the relationship extends much further.

India and Indonesia share centuries-old civilizational links dating back to ancient maritime trade, reflected in the cultural heritage of Bali, Java, and Sumatra. Today, those historical ties are evolving into cooperation across several strategic sectors, including:

  • Maritime security
  • Digital public infrastructure
  • Healthcare
  • Space cooperation
  • Tourism
  • Connectivity initiatives

Projects connecting India’s Andaman and Nicobar Islands with Indonesia’s Aceh Province have the potential to transform regional logistics and strengthen maritime cooperation across the eastern Indian Ocean.

Defence Cooperation Gains Momentum

Security cooperation is another important pillar of the relationship.

Potential progress on Indonesia’s acquisition of India’s BrahMos supersonic cruise missile system would represent a significant milestone for India’s defence exports. Following the successful export of BrahMos to the Philippines, such an agreement would reinforce India’s reputation as a reliable security partner in Southeast Asia.

For Indonesia, enhanced defence capabilities contribute to maritime deterrence. For India, they strengthen strategic partnerships across the Indo-Pacific without forcing regional countries into great-power rivalries.

Unlocking Untapped Economic Potential

Despite being India’s second-largest trading partner within ASEAN, bilateral trade remains well below its potential. Both governments have set an ambitious target of expanding trade significantly over the coming years.

Reducing the existing trade imbalance will require deeper investment partnerships rather than simply increasing merchandise trade. Critical minerals, manufacturing, renewable energy, and digital technologies offer promising areas for long-term collaboration.

A Strategic Moment for the Indo-Pacific

Prime Minister Modi’s Indonesia visit signals India’s intention to deepen engagement with one of its most consequential regional partners. The relationship is evolving beyond traditional diplomacy toward strategic cooperation in resources, technology, defence, and maritime security.

If India succeeds in securing a meaningful role within Indonesia’s nickel value chain, this visit may eventually be remembered as the moment when Nickel Diplomacy became a defining pillar of India’s Indo-Pacific strategy.

In an era where critical minerals increasingly shape global power, the future may depend as much on partnerships around battery materials as on traditional geopolitical alliances. Indonesia offers India a rare opportunity to strengthen both its economic resilience and its strategic influence—and this visit could be the first major step in that direction.

Source: The Indian Express

Podcast Episode: Rare Earths And Trade Tensions

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Pip: Welcome to the podcast where we track what the earth gives up and what the markets make of it — rare earths, trade deficits, and the occasional geopolitical scramble.

Mara: Today’s episode, shaped by posts from Nanthakumar Victor Emmanuel, P.Eng, covers three connected territories: Europe pushing back on its trade imbalance with China, a long-term rare earth supply deal out of Greenland, and the magnet problem sitting inside the Pentagon’s drone ambitions.

Pip: Let’s start with the EU-China trade picture.

EU and China: Rebalancing an Unequal Trade

Mara: The European Union is signaling it wants a different kind of relationship with China — one where the trade flows more evenly and the strategic vulnerabilities get addressed.

Pip: The numbers make the case bluntly. The EU’s trade deficit with China reached approximately 360 billion euros last year, and the post notes that “particular concern has centered on rare earth minerals after China imposed export restrictions last year, exposing Europe’s heavy reliance on Chinese supplies.”

Mara: So the upshot is Europe is not just haggling over tariffs — it’s reckoning with structural dependency. A summit in Brussels on June 18 and 19 is expected to advance those discussions, with a possible visit from China’s commerce minister also on the table.

Pip: Which makes Greenland’s rare earth story land with considerably more weight.

The Tanbreez Deal: Greenland’s 15-Year Commitment

Mara: The Tanbreez project in Greenland is one of the world’s largest known heavy rare earth deposits, and it just got a significant commercial anchor.

Pip: Critical Metals has signed a 15-year binding offtake agreement with REalloys, and the post quotes directly: “REalloys will receive priority rights to concentrate containing higher levels of the critical heavy rare earth elements, dysprosium and terbium, along with a right of first refusal over additional volumes.”

Mara: Those two elements — dysprosium and terbium — are exactly the heavy rare earths that go into the high-performance magnets defense and clean energy applications depend on. The deal formalizes and expands a non-binding agreement from last October, and follows Greenland’s April approval for Critical Metals to raise its ownership stake in the project to 92.5%.

Pip: Fifteen years is a long runway. That’s not a spot purchase — that’s a supply chain being built from the ground up.

Mara: Pricing is linked to international rare earth oxide benchmarks, and deliveries ship from the Tanbreez port in southern Greenland. The post frames this in the context of the U.S. and its allies stepping up efforts to secure critical mineral supplies outside China.

Pip: And REalloys turns up in the drone story too — which is where the magnet dependency gets very concrete.

300,000 Drones and the Magnet Bottleneck

Mara: The Pentagon has placed the largest drone order in American history — 30,000 one-way attack drones, with a target of scaling past 300,000 by early 2028. Every one runs on a rare earth magnet.

Pip: And the post puts the constraint in one number: “roughly 98% of the world’s magnets are manufactured in China.” That is a supply chain risk dressed up as an ambition.

Mara: REalloys is positioned as a direct response to that gap — holding what the post describes as the only fully non-Chinese mine-to-magnet heavy rare earth supply chain in North America, from processed metals through to magnet-ready inputs.

Pip: The Greenland offtake deal and this Pentagon supply problem are clearly two ends of the same chain.

Mara: Whether it’s Brussels negotiating with Beijing, Greenland locking in a 15-year deal, or the Pentagon counting magnets — the throughline is the same scramble to diversify critical mineral supply.

Pip: Next time, we’ll see where that scramble leads. The deposits are finite; the demand is not.

#Nickel associations of #Indonesia, #Philippines sign agreement on cooperation

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The nickel associations of Indonesia and the Philippines on Friday signed a memorandum of understanding on nickel cooperation, Indonesia’s coordinating ministry of economics said.

The agreement includes the exchange of information, joint development of nickel downstream processing technology, and human resource development to support a sustainable nickel industry ecosystem, the ministry said.

The signing was witnessed by Indonesia’s chief economics minister and the Philippines’ trade and industry minister.

“The Philippines will no longer be only an exporter of raw nickel ore as it will be integrated into a higher-value regional supply chain, while Indonesia will secure a reliable supply for its battery and stainless industries,” Philippines’ trade and industry minister said.

Indonesia exported $9.73 billion of nickel products last year, Airlangga said, adding that smelters in Indonesia required supplies with the proper silicon-to-magnesium ratio which can be supplied by the Philippines.

Source: Mining.com

#Jakarta: #Coal and #Nickel dilemma: Racing for revenue, lagging in readiness

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A silhouette of Indonesia features an industrial landscape on the left with smokestacks and an oil rig, and a renewable energy scene on the right with wind turbines. Road signs reading 'DEAD END' and 'Hope Ahead' are included.

A potentially widening budget deficit amid soaring global oil prices has prompted Jakarta to explore alternative revenue sources, including export duties on nickel and coal, commodities that are currently benefiting from relatively strong price trends.

The push for rapid revenue mobilization, however, appears to be running ahead of sectoral readiness. President Prabowo Subianto has approved a coal export duty, with tariffs reportedly still under discussion depending on price levels, initially slated for implementation on April 1. However, its rollout remains subject to ongoing cross-ministerial deliberations, particularly regarding its impact on mining sector profitability.

As highlighted by Energy and Mineral Resources Minister Bahlil Lahadalia, the structure of Indonesia’s coal exports complicates policy design. Around 60-70 percent of exports consist of low-calorific, lower-value coal, meaning that a uniform export duty risks disproportionately burdening producers operating on thin margins. This has prompted the minister to adopt a more cautious stance, delaying implementation until a more calibrated approach is formulated. Yet this caution contrasts with parallel intervention on the supply side. The government has tightened production through the Work Plan and Budget (RKAB) mechanism, capping approved output at around 580 million tonnes. This figure is well below the previous year’s realization of 790 million tonnes, aimed at preventing oversupply and supporting global prices.

The escalation of geopolitical conflict in the Middle East has helped sustain elevated energy and mineral commodity prices. Coal prices have remained consistently above US$135 per tonne, while nickel prices have also stayed relatively stable. This sustained price momentum has prompted the government to take strategic measures to safeguard the state budget. Export duty revenues in the 2026 state budget are projected to surge to Rp 42.56 trillion (US$2.5 billion), marking an increase of more than 850 percent. This sharp rise underscores the urgency behind recent policy initiatives.

This creates a fragmented policy mix. While fiscal authorities push for revenue mobilization through export duties, sectoral regulators simultaneously restrict output to stabilize prices. Rather than a fully coherent strategy, the current approach reflects an unresolved tension between short-term fiscal pressures and longer-term industrial and market considerations.

This tension becomes even more apparent when compared with the government’s more assertive stance in the nickel sector. The government is currently formulating an export duty on nickel-based products, particularly nickel pig iron (NPI), although the exact tariff structure and rates remain under deliberation. At the same time, supply-side controls have been introduced, with the nickel ore RKAB capped at around 150 million tonnes to safeguard domestic availability.

Read more at: https://www.thejakartapost.com/opinion/2026/04/08/analysis-coal-and-nickel-dilemma-racing-for-revenue-lagging-in-readiness.html?utm_source=(direct)&utm_medium=single_latest

#US – #Indonesia deal threatens #China’s ‘entrenched position’ in #nickel market: analysts

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China will accelerate investment in alternative nickel supply sources and strengthen its role across the metal’s wider supply chain, analysts said, after the United States finalised a deal with Indonesia recently that will give America unrestricted access to the country’s industrial commodities.

While the US Supreme Court’s tariff ruling could add some uncertainty to US-Indonesia trade, the agreement has the potential to reshape the global supply chain for nickel – a metal used to make stainless steel and some electric vehicle batteries.

“[The US-Indonesia deal] is quite important and China will not like it,” said Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at Natixis. “China does have leverage through its big stake in Indonesian nickel mines and could try to retaliate by slowing tech transfers or pulling back investment.”

Indonesia has emerged as a decisive player in the nickel market in recent years, accounting for more than 60 per cent of global mine supply for the metal, according to a Goldman Sachs article published last week.

Chinese investment has supported Indonesia’s expansion in nickel processing capacity, reinforcing the nation’s growing influence on the market, the article added.

The recent rally in global nickel prices – which saw the price of the base metal jump more than 30 per cent between mid-December and January – was largely driven by Indonesia’s decision to restrict how much ore could be mined, Goldman Sachs said.

Read more at: https://www.scmp.com/economy/china-economy/article/3344337/us-indonesia-deal-threatens-chinas-entrenched-position-nickel-market-analysts

#Nickel giants #Philippines, #Indonesia form alliance to strengthen regional supply chain

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Premier nickel industry bodies of the Philippines and Indonesia have entered into a partnership to formalize a regional supply chain corridor, aiming to cement Southeast Asia’s dominance in the global energy transition.

The Philippine Nickel Industry Association (PNIA) signed a partnership agreement with the Asosiasi Penambang Nikel Indonesia (APNI), otherwise known as the Indonesia Nickel Miners Association, to outline the shared direction of both countries’ nickel mining industries.

Under the agreement, the PNIA and APNI sought to promote the IndoPhil Nickel Corridor, a unified platform designed to elevate the global significance of Indonesian and Philippine nickel.

The corridor is envisioned to build investment confidence, encourage policy dialogue, and promote responsible mining, especially as mineral resources are becoming the central component to the global energy transition.

“The corridor signals that Philippine and Indonesian nickel is developed with clearer standards and accountability,” PNIA Executive Director Charmaine Olea-Capili.

By bringing together industry leadership from PNIA and APNI, Olea-Capili said the initiative demonstrates that both the Philippines and Indonesia are committed to building a supply chain that other countries can rely on.

The Philippines is the second-largest producer of nickel in the world, trailing Indonesia. Combined, the two countries are estimated to account for around 75 percent of the global supply of the mineral.

Nickel plays a critical role in supporting strategic sectors such as energy, mobility, and infrastructure, as well as the green and digital transitions.

Read more at: https://mb.com.ph/2026/02/13/nickel-giants-philippines-indonesia-form-alliance-to-control-supply

New tracking system to prevent fraud in #Nickel, #Tin mining

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The government has launched an online tracking system for nickel and tin shipments to increase state revenue and improve governance in the mining sector. Already implemented for coal shipments since 2022, the Mineral and Coal Information System (Simbara) has now been expanded to encompass nickel and tin and is to be applied to other metallic minerals in the future.

Resource-rich Indonesia is the world’s biggest producer of nickel and one of the largest producers of tin. Simbara will enable the government to track the supply of nickel and tin from mines to domestic smelters. Finance Ministry Budget Director General said the government had launched the online tracking system for nickel and tin shipments given the two commodities’ increasingly strategic role in national and global economic development.

Read more at: https://www.thejakartapost.com/business/2024/07/22/new-tracking-system-to-prevent-fraud-in-nickel-tin-mining.html.

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