Could Indonesia’s ‘Nickel Nationalism’ Be a Smart Approach?

The transition to renewable energy and the adoption of electric vehicles has seen the demand for critical minerals like nickel grow significantly. Nickel is a crucial component of electric vehicle batteries, especially Li-ion cathodes, as it improves performance and enhances energy density.

Indonesia is the leading producer of nickel globally, holding 22% of nickel reserves worldwide. In January 2020, the country banned the export of raw nickel ore as a way to encourage international firms to invest in domestic processing. This move saw billions in foreign investments for nickel smelters and battery materials plants begin to flow into the country, with its nickel exports seeing their value rise to $30 billion in 2022.

This is quite a change from the $6 billion it earned from nickel exports less than a decade before, with the primary difference being that it began selling ferronickel, battery chemicals, and stainless steel.

Exporting nickel and its derivatives has also created employment opportunities for many in the country and helped narrow trade deficits. Indonesia, which has since become a major player in the electric car supply chain, produced over 56% of mined nickel in 2024.

The country is now focused on building an end-to-end electric car supply chain onshore, which will involve mining, the production of batteries and possibly, the manufacture of electric cars.

With the demand for nickel by the EV industry growing, various concerns like the impact of environmental degradation and volatile swings in the market and how they could affect Indonesia has many questioning whether the country’s economy would come out greater or the opposite.

Overreliance on Chinese investment and technology is another pressing concern, with some arguing that an increase in geopolitical frictions or an alternative source of nickel could impact Indonesia’s growth negatively. Currently, China controls a huge chunk of the country’s value chain, with many foreign companies dominating new smelters.

Indonesia also defied a decision made by the World Trade Organization ruling against its ban on ore exportation. In its argument, the organization explained that this decision broke trade agreements.

While the ban was embraced by China, non-Chinese investors are more hesitant, with some arguing that insistence by Indonesia to manage its resources may result in trade retaliation.

Currently, the country is at a crossroads: does it ride the nickel wave blindly without implementing any changes or commit to economic diversification and sustainable practices as a way to secure long-term success? We wait to see the choices it makes over the next few years.

As concerns grow about nickel from Indonesia, other producers like Platinum Group Metals Ltd. (NYSE American: PLG) (TSX: PTM) are looking to leverage the opportunities that come from shifts within the commodities market due to geopolitical changes.

About MiningNewsWire

MiningNewsWire (“MNW”) is a specialized communications platform with a focus on developments and opportunities in the Global Mining and Resources sectors. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled recognition and brand awareness.

MNW is where breaking news, insightful content and actionable information converge.

To receive SMS alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)

For more information, please visit https://www.MiningNewsWire.com

Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer

MiningNewsWire
Los Angeles, CA
www.MiningNewsWire.com
310.299.1717 Office
Editor@MiningNewsWire.com

MiningNewsWire is powered by IBN