75 percent of Indonesian nickel mining dominated by China
A recent report from the Center for Advanced Defense Studies (C4ADS), a global security nonprofit, found that Chinese firms control around 75 percent of Indonesian nickel production capacity. With Indonesia and China controlling 65 percent of the world’s refined nickel in 2023, the U.S. ought to be looking for opportunities to responsibly develop its world-class nickel deposits — including in Minnesota’s Duluth complex.
Indonesia is projected to account for 44 percent of the world’s refined nickel by 2030. However, Indonesia’s nickel deposits are primarily produced from laterite ore, “which require substantially more energy to process into the high-grade, Class 1 nickel needed for EV batteries compared to the sulfide deposits in other countries.” That energy comes predominantly from coal.
Indonesia is also under scrutiny for “lax workplace safety within Indonesian processing facilities,” with over 90 deaths and a hundred injuries reported between 2015 and 2023. In 2024, the U.S. Department of Labor listed Indonesian nickel as a good produced by forced labor.
The report found that Chinese companies or shareholders control 61 percent of Indonesia’s nickel refining capacity as of 2023. More than 75 percent of refining capacity in Indonesia is controlled by Chinese stakeholders. Two Chinese companies accounted for more than 70 percent of Indonesia’s refining capacity, having been early investors in Indonesia’s domestic nickel processing industry.
The U.S. is vulnerable to supply chain disruptions for many goods that rely on Indonesian and Chinese nickel, including the electric vehicles, solar panels, wind turbines, and battery storage that would be necessary to power energy transition ambitions. The International Energy Agency estimates that there would need to be 60 more nickel mines constructed by 2030 to meet global net carbon emissions goals. Other estimates suggest at least 70 new nickel mines would be needed by 2030.
How many of them will be in the U.S.? None, unless the U.S. fixes its lengthy and litigious permitting process.
Minnesota, and the U.S. in general, have world-class nickel deposits that could be mined with the highest environmental safeguards and stringent worker health and safety provisions. Indonesian nickel meets neither standard. Chinese dominance of the nation’s nickel “raises concerns about supply chain resilience” and may endanger supplies of nickel products like stainless steel, lithium-ion batteries, and the technology that depends on it.