ASIATODAY.ID, JAKARTA – For decades, nickel was rarely mentioned alongside oil, gold, or copper as one of the world’s strategic commodities. It was primarily known as an industrial metal used to produce stainless steel, quietly supporting sectors ranging from construction and shipbuilding to aerospace and heavy manufacturing.
Today, that reality has fundamentally changed.
As the global transition toward electric vehicles (EVs) and clean energy accelerates, nickel has emerged as one of the world’s most sought-after critical minerals. Governments are redesigning industrial policies to secure stable supplies, multinational mining companies are investing billions of dollars in new projects, and automakers are racing to lock in long-term access to battery-grade nickel.
At the center of this global transformation stands Indonesia.
Once known simply as an exporter of raw nickel ore, Southeast Asia’s largest economy has rapidly evolved into the world’s dominant producer and processor of nickel. This transformation has not only reshaped Indonesia’s industrial landscape but has also altered the balance of power within the global critical minerals supply chain.
The rise of Indonesia raises a fundamental question.
Has the country truly become the world’s nickel powerhouse—or does control over technology, financing, and downstream manufacturing still lie elsewhere?
From Stainless Steel to the Electric Vehicle Revolution
For most of the twentieth century, nickel’s economic value was tied almost entirely to stainless steel production.
Its exceptional resistance to corrosion and high temperatures made it indispensable across modern industries. Roughly two-thirds of global nickel output was consumed by stainless steel manufacturers, while the remaining share supplied specialty alloys, aerospace applications, electronics, and defense industries.
The emergence of electric vehicles completely changed that equation.
High-performance lithium-ion batteries—particularly Nickel-Manganese-Cobalt (NMC) and Nickel-Cobalt-Aluminum (NCA) chemistries—require significant quantities of high-purity nickel to increase energy density and extend driving range.
As a result, nickel has evolved from an industrial commodity into one of the world’s most strategic critical minerals, joining lithium, cobalt, graphite, and rare earth elements at the heart of the global energy transition.
Suddenly, securing nickel supplies became a matter not only of industrial competitiveness but also of national economic security.
The World Needed a New Supplier
For decades, global nickel production relied heavily on sulfide deposits concentrated in countries such as Canada, Russia, and Australia.
These deposits were relatively easy to process into high-grade nickel, allowing Western mining companies to dominate international markets throughout much of the twentieth century.
However, the situation began to shift dramatically in the early 2000s.
High-grade sulfide reserves became increasingly scarce, while China’s rapid industrialization triggered unprecedented demand for stainless steel and, later, battery materials.
The world faced an uncomfortable reality: demand was growing much faster than traditional producers could supply.
The solution was found thousands of kilometers away—in the tropical laterite deposits of Indonesia.
Indonesia’s Unexpected Rise
Unlike Canada or Russia, Indonesia possesses vast laterite nickel reserves.
For decades, these deposits were considered less attractive because they were technically more difficult and more expensive to process than sulfide ores.
Everything changed when Chinese metallurgical companies successfully commercialized Rotary Kiln–Electric Furnace (RKEF) technology, enabling laterite ore to be economically converted into Nickel Pig Iron (NPI).
That technological breakthrough transformed Indonesia’s vast but previously underutilized resources into one of the world’s most valuable strategic assets.
Virtually overnight, Indonesia shifted from being a peripheral supplier to becoming the centerpiece of the global nickel industry.
A Global Shift in Industrial Power
Technology reshaped geography.
The center of gravity of the global nickel industry gradually shifted away from North America and Europe toward Asia.
China became the world’s largest nickel processor and stainless-steel producer.
Indonesia became the world’s largest supplier of nickel ore and, increasingly, processed nickel products.
Together, the two countries created a new industrial axis that fundamentally transformed global supply chains.
This shift has forced the United States, the European Union, Japan, South Korea, and other advanced economies to rethink their strategies for securing critical minerals essential to clean-energy technologies.
Nickel is no longer simply a commodity.
It has become a geopolitical asset.
Indonesia Becomes the World’s Largest Producer
Today, Indonesia holds approximately 42 percent of the world’s known nickel reserves while accounting for more than 60 percent of global nickel production, making it by far the largest player in the industry.
No other country combines such extensive mineral resources with rapidly expanding processing capacity.
Indonesia’s policy decisions—from export regulations to downstream industrial development—now influence global nickel prices, investment flows, and supply-chain strategies across the electric vehicle industry.
Its role has become too significant for international markets to ignore.
Beyond Mining: The Next Challenge
Indonesia’s remarkable success, however, presents a more complicated question.
Owning abundant mineral resources is only one part of the equation.
Much of the advanced processing technology, project financing, battery manufacturing expertise, and access to international markets remains concentrated in foreign companies, particularly those with significant investments in Indonesia’s nickel industry.
In other words, Indonesia has become the world’s largest producer—but whether it will become the dominant creator of value across the entire nickel supply chain remains uncertain.
The next phase of competition will no longer revolve around mining alone.
It will focus on refining technology, battery materials, electric vehicle manufacturing, innovation, sustainability standards, and global market access.
The battle for nickel has evolved into a contest over who will shape the future of the global clean-energy economy.
And in that contest, Indonesia now occupies one of the most strategic positions on Earth.
Editor’s Note
This special report is adapted and expanded from a policy paper published by Indonesia’s National Development Planning Agency (Bappenas) on the evolution of the global nickel industry and Indonesia’s strategic transformation. It is further enriched with analysis from international publications and datasets produced by the International Energy Agency (IEA), the World Bank, the International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United States Geological Survey (USGS), and other authoritative public sources.
Follow Us at Google News, WA Channel, and LinkedIn