Experts agree that Indonesia’s president-elect Prabowo Subianto will continue to build up the nation’s vertically integrated nickel industry.
What is less certain is how he will balance the nation’s relationship with China—currently the biggest foreign investor in the country’s nickel industry—with ambitions to attract Western investors who will be more concerned about the sector’s toll on the environment and local communities.
“The Indonesian government appears divided,” said Ahmad Syarif, a doctoral candidate in international affairs at Johns Hopkins University and an expert in Indonesian energy and natural resources issues.
“One faction advocates for environmental reforms within the nickel industry, while the other does not feel an immediate need for such changes, primarily because Chinese companies, as the main consumers, have not raised substantial concerns,” he told Benzinga.
“However, should Indonesia aim to diversify its nickel processing exports beyond China, the situation necessitating environmental standards may significantly change,” he said.
Electric-Vehicle Ambitions
Indonesia holds the world’s biggest nickel reserves and undercuts foreign competitors on price in part because of subsidized coal used to generate electricity for the nickel refining process. The president-elect’s predecessor, who holds the presidency until October, banned exports of raw nickel ore to promote domestic value addition in refining.
It appears that Subianto wants to continue building up the …