Chinese Miners Should Rethink Indonesia Playbook as Nickel Controls Tighten, Insiders Say
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A nickel mining site on Gag Island, Indonesia. Photo: VCG
Chinese mining companies should revise their Indonesia playbook, shifting from manic investment to more calculated, localized operations as the resource-rich nation tightens its grip on the nickel sector, according to industry insiders.
Speaking at the 4th DBS Metals and Mining Indonesia Forum on Wednesday, Bo Shaochuan, a director at Zijin Mining Group Co. Ltd., noted that while early capital inflows were largely trend-driven, the current landscape demands deeper consideration. As policy and regulatory environments evolve, companies must now optimize their investment models to ensure sustainability, he said.
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- Indonesia controls around 43% of global nickel reserves, making it central to the EV supply chain; Chinese companies have heavily invested in its nickel sector.
- The Indonesian government has tightened regulations, raising royalties on nickel and requiring foreign miners to gradually divest 51% ownership to local entities.
- Experts advise that Chinese mining firms must localize operations, partner with local stakeholders, and adapt to evolving legal and regulatory frameworks for sustained success.
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Who’s Who
- Zijin Mining Group Co. Ltd.
- Zijin Mining Group Co. Ltd. is a Chinese mining company. Bo Shaochuan, a director at Zijin Mining, highlighted the need for Chinese mining companies to move from trend-driven capital inflows to optimized investment models for sustainability in Indonesia's evolving regulatory landscape. The company is evaluating its strategy amid Indonesia's tightening grip on the nickel sector.
- Tsingshan Holding Group Co. Ltd.
- Tsingshan Holding Group Co. Ltd. is a major Chinese player that invested significantly in Indonesia's nickel sector between 2021 and 2023. These investments focused on building out nickel smelting, processing, and recycling infrastructure. Tsingshan has been highlighted as a successful Chinese venture in Indonesia, leveraging partnerships to co-develop the local nickel industrial chain. This strategy is considered crucial given Indonesia's evolving regulatory landscape and the importance of localization for foreign investors.
- Zhejiang Huayou Cobalt Co. Ltd.
- Zhejiang Huayou Cobalt Co. Ltd. (603799.SH) is a major Chinese player that invested significantly in Indonesia's nickel sector between 2021 and 2023. These investments focused on building nickel smelting, processing, and recycling infrastructure, driven by the booming electric-vehicle market and high nickel prices.
- GEM Co. Ltd.
- GEM Co. Ltd. (002340.SZ) is a major Chinese player that invested significantly in Indonesia's nickel sector between 2021 and 2023. These investments focused on building out nickel smelting, processing, and recycling infrastructure, driven by the boom in electric-vehicle sales and high nickel prices.
- Contemporary Amperex Technology Co. Ltd. (CATL)
- Contemporary Amperex Technology Co. Ltd. (CATL) is a major Chinese player that has invested capital in Indonesia. They, along with other companies, have poured money into building nickel smelting, processing, and recycling infrastructure to support the electric-vehicle supply chain. CATL has a subsidiary successful in Indonesia due to partnering with local entities.
- Macquarie Group Ltd.
- Macquarie Group Ltd., an Australian multinational independent investment bank and financial services company, conducted research indicating that Indonesia's nickel export revenue surpassed coal for the first time in the first half of 2025. This highlights the growing significance of the nickel sector as an economic pillar for Indonesia.
- Beijing Antaike Information Co. Ltd.
- Xu Aidong, chief engineer at Beijing Antaike Information Co. Ltd., cautioned that the Indonesian government's close oversight of the nickel industry presents potential risks. Specifically, policies restricting supply could lead to market volatility. Xu also advised that finding local partners is essential for Chinese firms operating in Indonesia to navigate legal, regulatory, and cultural nuances.
- Zhong Lun Law Firm
- Zhong Lun Law Firm is mentioned as having partner Xia Lei, who specializes in navigating Indonesia's complex legal frameworks related to investment, resource management, and industry-specific regulations. Xia Lei highlighted challenges for foreign investors in Indonesia, including strict divestment requirements and barriers in downstream processing.
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What Happened When
- 2021-2023：
- Investment boom in Indonesia’s nickel sector driven by soaring EV sales and high nickel prices; major Chinese players invested heavily.
- 2024：
- Indonesia holds approximately 43% of the world’s nickel reserves according to the U.S. Geological Survey.
- First half of 2025：
- Nickel export revenue in Indonesia surpassed coal for the first time.
- April 2025：
- Indonesian government increased royalties on nickel ore to 14%-19% (from 10%); set new royalty rates for nickel pig iron, ferronickel, and raised rates for nickel matte.
- 2025：
- Indonesian government introduces tighter fiscal and policy measures including adjustments to royalties, tax structures, supply quotas, and tracking systems.
- 2025：
- Downstream processing restrictions in Indonesia force foreign companies to build domestic processing facilities for nickel.
- As of 2025：
- China’s mining companies in Indonesia face increased legal, regulatory, and operational challenges; localization becomes imperative.
- Early October 2025：
- Jakarta announced adjustments to the mining production quota approval system (RKAB); starting 2026, quota review cycle will shift to annual basis.
- November 26, 2025：
- Bo Shaochuan of Zijin Mining Group spoke at the 4th DBS Metals and Mining Indonesia Forum about the changing landscape for Chinese companies in Indonesia.
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