Want to control China's nickel prices? Indonesia announces a new nickel ore pricing mechanism, but Chinese enterprises jointly issue an ultimatum—Prabowo slams the table and declares: "We won’t sell!"
In May 2026, Indonesian President Prabowo delivered a forceful speech before parliament, stating with firm resolve: “We must set our own prices. If anyone doesn’t accept it, they can choose not to buy—we’ll keep these resources for ourselves.”
According to a report by Nikkei Asia on May 13, the Chinese Chamber of Commerce issued a letter addressed to Indonesian President Prabowo that day, with unusually sharp language. The letter pointed out that Indonesia has drastically reduced nickel mining output, with large-scale mining operations cut by over 70%, placing Chinese companies in serious difficulties—and potentially leading to capital withdrawal.
Citing Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia on May 11, as reported by Global Finance, Indonesia originally planned to raise mining royalty fees and export taxes on mineral products, but after collective protests from Chinese firms, announced a temporary suspension, stating it would re-evaluate feedback from all parties. From policy announcement to abrupt halt, the turnaround took only about 20 days.
As analyzed by Reuters on May 13, Chinese enterprises operating in Indonesia sent a strongly worded letter warning that tightened mining quotas, increased taxes, and the new pricing system are significantly raising costs and threatening investment prospects. Indonesia’s decision to delay tax hikes aims to balance fiscal revenue with investment conditions.
Indonesia is the world’s largest holder of nickel resources, accounting for approximately 42% of global reserves and supplying around 65% of global demand. However, since most exports have gone to Chinese enterprises, Indonesia has long complained about earning too little. Now, Jakarta aims to completely squeeze profit margins for Chinese firms operating in its nickel mines.
Indonesia believed that the sharper the blade, the greater the gain when it strikes. But this time, Chinese enterprises chose not to endure. The core logic behind this round of countermeasures is clear: if you don’t let me make profits, I won’t invest in you. Chinese investments exceeding $14 billion have been poured into Indonesia’s nickel processing, smelting, and downstream battery industries—establishing absolute dominance. Should these funds actually pull out, Indonesia’s status as the “global leader in nickel” would be directly threatened.
This round of nickel price confrontation is merely a microcosm of the broader power shift between resource-rich nations and manufacturing giants. Indonesia’s strategy of restricting supply and raising prices may not yield the expected results, while China’s efforts to reduce reliance on nickel are no short-term endeavor. In this game, the full cards haven’t even been revealed yet.
Original article: toutiao.com/article/1866031142352964/
Disclaimer: This article reflects the personal views of the author