Market power Indonesia – from the largest ore exporter to the leading nickel supplier for the green transition

Because of its specific properties, nickel is set to play a key role in the implementation of new megatrends such as the energy and mobility transition. Nickel is used in many industries, primarily in the manufacture of stainless steel and nickel alloys. In addition to these established areas of application, a considerable increase in global nickel demand for battery production is expected until 2030, particularly due to the rapid global ramp-up of electric mobility.

Within this decade the global nickel demand is forcast to double. While the battery production in recent years was based mainly on the dissolution of nickel metal (so-called class 1), things changed in 2022 with intermediates (mainly MHP and nickel matte) representing the by far dominant nickel feed for the batttery production.

Currently, Indonesia is the only country to significantly increase the mine production to provide the necessary nickel intermediates to meet the future demand. Indonesia holds the largest nickel reserves and until 2013 was the worldwide leading nickel ore supplier. With the introduction of an nickel ore export ban, the country became the leading producer of refined nickel products within less than ten years. Moreover, Indonesia is already the by far largest exporter of nickel intermediates for the global battery value chain. However, this dramatic change is based mainly on Chinese investments. It raises questions on the secure and sustainable global nickel supply.