How the EV boom led Chinese companies to take over Indonesia’s nickel industry

Nickel mining in Indonesia has surged, making it the world's top producer of the metal. With over 14 active mines, Indonesia supplies more than 40% of global nickel demand, driven by its crucial role in electric vehicle (EV) batteries.

"Nickel is needed for the development of the electric vehicle sector, which is going to benefit the environment and the path to greening the global economy and meeting climate change targets," said Jason Sappor, Senior Analyst at S&P Global Commodity Insights.

The rapid growth in nickel production is closely linked to Indonesia's partnership with China, the largest global EV battery producer. Chinese investments have bolstered Indonesia's mining capabilities, focusing on refining nickel locally following a 2022 ban on raw nickel exports. Despite economic benefits, concerns about the environmental impact are rising, including water pollution and deforestation near mining sites.

Increased nickel production in Indonesia has led to oversupply and lower prices, impacting producers in Australia and Canada. In America, companies like Talon Metals are advocating for secure supply chains by developing local nickel sources under strict environmental standards, partnering with automakers, like Tesla, and promoting battery recycling to meet rising global demand for EVs and renewable energy.

"It makes all the sense in the world that because we have these resources domestically and with our free trade allies, that we would want these companies to source where they can get it," said Todd Malan, the chief external affairs officer of Talon Metals. "It's produced at a high standard. It's a little more expensive to do that sourcing, but not that much more expensive that it's going to change the price of the