Indonesia’s top investor China has warned that $50bn of investments in the country could be at risk from policy changes that it says stand to disrupt the huge nickel industry in south-east Asia’s largest economy.Chinese companies dominate Indonesia’s nickel industry, which has expanded rapidly in recent years on growing demand for the mineral critical to manufacturing stainless steel and EV batteries. Jakarta controls more than two-thirds of global refined nickel supply.
But Beijing is worried about new regulations introduced recently that slashed production quotas for miners and established a pricing mechanism that has raised the price of nickel ore.
The pricing adjustment has led to a near-200 per cent increase in production costs for the nickel variety used to manufacture EV batteries, threatening the “operational viability of nearly all such projects”, the Chinese embassy said in a letter to Indonesia’s Ministry of Energy and Mineral Resources that was seen by the FT and has not been previously reported.