Mapping Indonesia’s Nickel and Cobalt Value Chain
Environmental, social, and governance risks, technology trends, and strategic pathways for sustainable value addition
Indonesia is leveraging its vast nickel and cobalt resources to move beyond mining and build higher-value battery and industrial value chains. This report examines the opportunities and risks of this downstreaming strategy, including shifts in battery technologies and markets, geopolitical and resource constraints, and rising environmental, social, and governance (ESG) expectations.
Policy Recommendations
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Indonesia should invest in battery-grade nickel to capture electric vehicle opportunities, while also moving further downstream in stainless steel—the primary global market for nickel. Diversification strategy can reduce exposure to shifts in technologies and market demand.
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Strengthening ESG performance can help Indonesia remain competitive. Meeting growing market expectations will require stronger decarbonization and renewable energy use, labour, community, and Indigenous rights, and credible traceability.
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Developing domestic recycling and better use of industrial waste in Indonesia can reduce pressure on finite nickel reserves while creating additional value.
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Investing in skills, technology, and innovation can capture more value locally while also broadening partnerships for investment, processing technology, lithium, and other critical inputs to reduce geopolitical and supply risks.
Indonesia has the world’s largest nickel reserves and is a major global supplier, producing 2 million tonnes in 2023—around 55% of global output. It also has substantial cobalt reserves, another key battery mineral, supplying 13% of global primary production that year.
However, the rapid expansion of nickel and cobalt mining and processing have brought ESG, resource, and geopolitical risks, while shifts in battery technologies are reshaping the outlook for nickel demand.
This report examines how Indonesia can increase value addition from its nickel resources and capture greater economic opportunities across the supply chain. It considers the outlook for battery materials, stainless steel, and other nickel applications, alongside evolving technologies, resource depletion, global market shifts, and geopolitical dynamics.
Indonesia’s opportunity lies not only in producing more nickel, but in building a value chain that generates sustainable economic growth. Realizing the full potential of its nickel resources will require a broader approach that strengthens domestic capabilities, improves resource efficiency, and addresses the environmental and social impacts of industry expansion.
Participating experts
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