Chinese Firms Control 75% of Indonesia’s Nickel Refining Capacity, Report Finds
Chinese companies control approximately 75% of Indonesia’s nickel refining capacity, raising concerns over supply chain dominance and environmental risks, according to a report by Washington-based global security nonprofit C4ADS. The report highlights that Indonesia's 8 million metric tons of refining capacity, spread across 33 companies, shows significant shareholder overlap, with Chinese firms holding the majority stake as of 2023.
The report warns that this foreign influence could limit Indonesia’s ability to fully control and shape its nickel industry, which it aims to leverage for economic growth. Nickel is a critical component in electric vehicle (EV) batteries, and the heavy reliance on Chinese-controlled nickel production may place U.S. and European automakers at a competitive disadvantage, especially amid tightening trade restrictions with China.
Indonesia's mining ministry has not commented on the report. However, an Indonesian official noted last year that Chinese firms were exploring partnerships with Indonesian and South Korean companies to reduce their stakes in smelters and enhance accessibility to the U.S. market. President Prabowo Subianto has formed a task force to promote the downstream mineral industry with domestic financing, aiming to reduce perceptions that foreign entities reap the most benefits, according to Mining Minister Bahlil Lahadalia.
The report identifies Tsingshan Holding Group and Jiangsu Delong Nickel Industry Co Ltd as the dominant players, accounting for over 70% of Indonesia’s refining capacity. These companies were among the first to invest when Indonesia began emphasizing domestic processing of nickel ore, a strategy that has positioned the country as the world’s leading nickel producer.
Despite their dominance, these firms have faced challenges. In December 2023, a fire at a Tsingshan facility in Central Sulawesi resulted in fatalities, leading to the sentencing of two workers to seven months in prison for negligence. Earlier in 2023, two workers were killed in clashes at the PT Gunbuster Nickel Industry smelter in North Morowali, owned by Jiangsu Delong.
Tsingshan has started divesting some of its smelter stakes, including a deal in October with Indonesian state miner Aneka Tambang, which acquired a 30% stake in PT Jiu Long Metal Industry. Tsingshan’s subsidiary Eternal Tsingshan and Jiangsu Delong’s joint venture Obsidian Stainless Steel did not respond to requests for comment.
