Indonesia tightens control on nickel as the US and China scramble for critical minerals

Indonesia is tightening state control over its globally important nickel industry after years of betting that the metal would anchor a homegrown electric-vehicle industry

HANOI, Vietnam -- Indonesia is tightening state control over the world’s largest nickel supply after years of betting the metal would anchor a homegrown electric-vehicle industry, and just as global demand begins shifting away from heavy reliance on nickel.

The move could still ripple through global EV supply chains as the United States and China compete for critical minerals. Indonesia sits at the center of the nickel market: its share of global supply jumped to about 60% in 2024 from 31.5% in 2020, according to S&P Global Market Intelligence, after former President Joko Widodo banned raw ore exports, drawing a surge of Chinese-backed investment into refining.

Jakarta hoped that control over nickel would underpin a fully domestic EV industry, from mining and batteries to finished cars. Experts say that promise was used to justify forest clearing and mining expansion in the name of the energy transition, even as climate risks deepened.

In 2025, Indonesia cracked down on what it called illegal exploitation of natural resources, saying many mining and plantation licenses were tainted by bribery or never properly approved. Authorities say they have seized more than 4 million hectares (9.8 million acres) of mines, palm oil plantations and processing sites, levied $1.7 billion in fines, and could seize another 4.5 million hectares this year.

But analysts warn the crackdown is coming just as nickel’s payoff is starting to fade, with many Chinese EVs shifting to battery chemistries that use far less of the metal, relying instead on iron-based designs.