China Controls 75% of Indonesia’s Nickel Production
According to , Chinese companies control about 75% of Indonesia’s nickel processing capacity, raising concerns over industry independence and geopolitical risks.
Why Is This Important?
Nickel is a key component in electric vehicle (EV) battery production, and China’s dominance in the sector gives Beijing a major strategic advantage.
A report from the Washington-based think tank states that in 2023, Indonesia processed 8 million metric tons of nickel, with three-quarters of smelting operations controlled by Chinese firms.
Experts warn that this dependence:
- Limits Indonesia’s control over its own mining industry.
- Puts the U.S. and EU at a disadvantage in the battery and EV market.
- Poses environmental risks, as China’s processing standards are less strict than those in Western nations.
How Is Indonesia Responding?
The Indonesian government is aware of the issue and is taking steps to reduce its reliance on Chinese investment.
- Chinese firms have started seeking partnerships with Indonesian and South Korean companies to lower their stake in smelters and make their products more accessible to the U.S. market.
- President Prabowo Subianto has created a special task force to increase domestic financing in the mining sector.
- Mining Minister Bahlil Lahadalia has stated that authorities want to change the perception that foreign companies reap the greatest benefits from Indonesia’s resources.
What’s Next?
China is likely to maintain its control over Indonesia’s nickel industry, but it will face increasing pressure from both Jakarta and the West.
The key question remains: Can Indonesia reclaim control over its strategic resources and reduce China’s dominance?
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