Indonesia is increasing state control over its nickel mining and refining sectors to secure a dominant position in the global electric-vehicle battery supply chain [1].
This move gives Jakarta unprecedented influence over a critical mineral required for green energy transitions. Because the country controls such a vast portion of the refined supply, its domestic policy decisions now directly impact the production costs and availability of batteries worldwide.
Government officials and state-owned enterprises are overseeing the implementation of policy changes first announced in 2026 [1]. These measures are primarily concentrated on the islands of Sulawesi and Halmahera, where the majority of the nation's nickel smelters are located [1].
Indonesia currently ships approximately 90% [1] of the world's refined nickel. While some reports suggest the figure is around 80% [2], the higher estimate underscores the country's role as the primary global supplier.
"Indonesia is tightening state control over the world’s largest nickel supply after years of betting the metal would anchor a homegrown electric‑vehicle industry," the Associated Press said [1].
This shift in control creates friction with international partners, particularly China. China currently controls roughly 75% [3] of the nickel-refining capacity within Indonesia. A Reuters correspondent said China has warned Jakarta that these new rules could disrupt its own supply lines [3].
By restricting raw ore exports and forcing more refining to happen domestically under state supervision, Indonesia aims to increase state revenue and move up the value chain from raw material extraction to high-tech manufacturing [1].
"The country now ships about 90% of the world’s refined nickel, giving it unprecedented leverage over the battery supply chain," a Financial Times analyst said [2].
“Indonesia currently ships approximately 90% of the world's refined nickel.”
Indonesia's strategy represents a shift toward 'resource nationalism,' where a state leverages its natural monopolies to force industrialization. By controlling the refined nickel market, Indonesia is no longer just an exporter of raw materials but a gatekeeper for the global EV industry. This creates a strategic tension between Jakarta's desire for domestic growth and China's need for stable mineral access, potentially forcing Western automakers to diversify their supply chains or negotiate directly with the Indonesian state.
