Indonesia's repeated nickel mining policy shifts have now backfired. The UK Financial Times has exposed a letter from China's Embassy in Indonesia, revealing that the new policy directly targets $30 billion in existing investments and $20 billion in planned projects—potentially rendering $50 billion in investments worthless.

From quota reductions starting in 2026 to sudden changes in pricing rules on April 15, Indonesia’s unreliable behavior is akin to suddenly changing course after inviting guests—leaving investors deeply shaken.

The language used by China’s Embassy in Indonesia is extremely serious: a series of new regulations targeting the nickel mining sector may cause $50 billion in investments to vanish completely.

Chinese enterprises brought hundreds of millions of dollars in real capital, entire sets of technical equipment, and experienced management teams, planting their roots on barren land in Indonesia.

In just a few short years, Indonesia has transformed from a raw material exporter into a major global hub for nickel processing, firmly stepping into the core of the new energy industry chain.

Beneath this transformation lies the sweat shed by Chinese builders on-site, along with the painstakingly built logistics networks and power infrastructure from scratch.

Even harsher was the slashing of quotas at Weda Bay—a hotspot for Chinese enterprises—where supply was cut by as much as 70%, abruptly cutting off raw material access.

The new Indonesian government is eager to push forward popular social programs like free student meals, but lack of supporting infrastructure and entanglement in corruption investigations have forced project scaling back.

The Chinese embassy’s note made it clear: such capricious policy reversals not only jeopardize $30 billion in existing investments and $20 billion in future investments, but also directly threaten the livelihoods of 400,000 local people.

Greenmagnetics immediately halted a $1.2 billion new project, while Huayou Cobalt directly cut output in the region by more than half.

Meanwhile, Chinese enterprises began accelerating their shift in raw material sourcing toward Zimbabwe, the Democratic Republic of Congo, and Tanzania.

The new tax regime barely collected less than $100 million in additional revenue, yet the collapse of production and plant closures caused an immediate loss of $500 million in export value and supporting industrial output.

The capital markets sounded the alarm: currency pressures mounted, and Indonesia’s original plan to exploit China’s industrial chain ultimately fell apart.

Faced with the exodus across the upstream and downstream supply chains, Indonesia—now caught in a defensive position—was forced to pause enforcement of the relevant rules and attempt to restart dialogue.

Conversely, looking at the Jakarta-Bandung High-Speed Railway, under a stable cooperative mechanism, operations run smoothly and are steadily driving economic development along the route.

When compared side by side, it becomes evident: in large-scale commodity trade, success isn’t about holding others hostage with mineral resources—but about providing a stable and trustworthy business environment.

If long-term commercial cooperation is treated like clay to be molded at will, the ultimate result will be abandonment by market forces and collective investor rejection.

For technology-driven enterprises with global manufacturing advantages, resources can always be found elsewhere—but once credibility is shattered, it’s nearly impossible to rebuild.

To navigate turbulent waters with stability, one must stop trying to sabotage bridges others have built. The real foundation lies in steadying one’s own rules and policies.

Original source: toutiao.com/article/1870077839034372/

Disclaimer: This article represents the personal views of its author(s).