Navigating the Complexities of Indonesia's Journey to Develop a Downstream Nickel Industry

Abstract This chapter analyzes how Indonesia became the world’s largest refined nickel producer through policy measures and, notably, a ban on nickel ore exports. Indonesia's policy to develop a downstream nickel industry aimed at boosting domestic nickel processing capabilities and further establishing the country as a key player in the global nickel and battery supply chains. Holding the world's largest nickel reserves, Indonesia has managed to attract over USD 30 billion on processing and smelting facilities, mostly from China-based companies. While this project has transformed Indonesia into the top refined nickel producer, it has also introduced significant negative environmental and health impacts. These include labor safety incidents, deforestation, high carbon emitting processes, negative impacts on air quality and water supply, as well as an increased reliance on Chinese companies on global battery supply chains. This analysis delves into these multifaceted impacts of the Indonesian case, highlighting critical factors, risks, and potential lessons for policymakers in other resource-rich developing nations.