Nickel - Indonesia's ascent
Updated: Oct 6
This article is part of our “One metal a month” series, in which we explore one strategic metal at a time and its role in the energy transition and global supply chains. These materials are increasingly shaping industrial competitiveness and geopolitics, while raising urgent questions about security of supply, recycling, environmental impact and price volatility. This is the July edition of the series.
As with cobalt, German miners in the sixteenth century had a name for the reddish ore that kept fooling them into thinking they had found copper: Kupfernickel, roughly “devil’s copper.” It took until the 1750s for Swedish chemist Axel Cronstedt to isolate nickel, and until the nineteenth century for it to find steady industrial use.
Nickel turned out to be an exceptionally useful element: hard, ductile, resistant to heat and corrosion, conductive and highly recyclable. Those properties directed most of its demand into alloys, particularly steel. Stainless and alloy steels still account for roughly 75% of global nickel demand, according to the IEA, and are widely used in industry, construction and home appliances.
With the energy transition and technology innovations, nickel has found a new role. It is now a key ingredient in lithium-ion battery cathodes, where it increases energy density and driving range. Energy technologies accounted for around 20% of global nickel demand in 2024, up from close to nothing a generation earlier. They also drove most of the estimated 6% growth in nickel demand that year.
Energy technologies accounted for around 20% of global nickel demand in 2024, up from close to nothing a generation earlier.
With this growing role in batteries, where nickel is mined and processed has become a strategic question. One country has emerged as the main producer (no, not China): Indonesia. According to the IEA, it holds more than 50 million metric tonnes of nickel reserves, over 40% of the global total, and already accounts for around two thirds of global mine production.
One country has emerged as the main producer: Indonesia.
Indonesia’s rapid rise in nickel mining and refining was the result of strategy. Jakarta banned exports of raw nickel ore, forcing companies to build smelters and refineries at home instead of shipping ore abroad for processing elsewhere. Billions of dollars followed into industrial complexes on Sulawesi and the Maluku Islands. By 2021, Indonesia’s first plant producing processed nickel for use in EV batteries was operating on Obi Island, marking the country’s move beyond raw ore and into the battery supply chain.
Its position is expected to strengthen further. By 2030, the IEA estimates that Indonesia will provide 67% of the world’s nickel mining and 45% of its refining.
However, its position becomes less commanding further down the value chain. Indonesia has begun refining nickel for batteries, but much of its refining industry still serves stainless steel. The more specialised production of finished battery chemicals, such as nickel sulphate, remains dominated by China, which produces around 60% of the global total.
The more specialised production of finished battery chemicals, such as nickel sulphate, remains dominated by China.
Indonesia is now trying to close that gap. The IEA projects a 3.5-fold increase in its nickel chemical output between 2024 and 2040, as the country moves further into the higher-value stages of the battery supply chain.
Whether Indonesia can extend its dominance from mining and broad refining into finished battery chemicals is one of the open questions for nickel’s next decade.
Authored by Diane Naffah (Terraquota), reviewed by Irina Chèvre (Terraquota)
31st July 2026
