Indonesia Targets India To Diversify Nickel Exports Away From China
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Jakarta – Breaking news: Teh Indonesian Nickel Miners Association has unveiled a plan to diversify its export markets by courting India as a new destination for stainless steel grade nickel. The move aims to lower reliance on a single buyer and broaden Indonesia’s footprint in global metals markets.
China currently accounts for about 90 percent of Indonesia’s nickel shipments, but the association is seeking to redirect roughly 30 to 40 percent of volumes toward India’s rapidly expanding market. The shift would diversify risk and open new avenues for downstream development.
The initiative is designed to strengthen Indonesia’s bargaining position, broaden downstream opportunities, and promote a more balanced pattern of international trade.
Industry voices caution that the effort hinges on how ore is valued. They say buyers often undervalue the combined worth of iron, chromium, and cobalt within nickel ore, creating revenue gaps and uneven global pricing.
APNI argues that broader mineral valuation policies and new trade partnerships are essential to achieve these goals and to advance domestic value addition in Indonesia’s nickel chain. World Bank and IMF analyses show that diversification strategies can increase resilience for commodity exporters, especially when pricing frameworks recognize the full mineral content.
Key Facts At A Glance
| Aspect | Detail |
|---|---|
| Current primary buyer of Indonesian nickel | China |
| Share of Indonesian nickel exports to China | About 90 percent |
| Target redirected volume to India | 30-40 percent |
| Primary aims | Diversify destinations, expand downstream capacity, reduce risk |
| Valuation concern | Iron, chromium, and cobalt within ore may be undervalued |
| Strategic path | Broaden mineral valuation policies; pursue new trade partnerships |
Evergreen Insights for Long-Term Value
- Diversification reduces exposure to price swings and policy shifts in a single market.
- Expanding downstream processing can raise added value and strengthen domestic industries.
- Fair and obvious ore valuation helps stabilize global pricing and government revenues.
- India’s growing stainless steel demand makes it a natural partner for Indonesian nickel in a broader supply chain.
- Policy coordination and infrastructure investments are key to turning diversification into lasting economic gains.
Reader Questions
- How soon could India mature into a major downstream hub for Indonesian nickel?
- What policy changes are essential to ensure fair ore valuation and smooth cross-border trade?
Share your thoughts in the comments and tell us how you think this shift could reshape the global nickel market.
**Drivers of the Gap**
Indonesia’s Nickel Production Landscape
- Indonesia remains the world’s top nickel ore exporter, delivering ≈1.2 mt of nickel ore in 2024, up 9 % year‑on‑year (Reuters, 2025).
- The country’s “nickel‑first” policy, introduced in 2022, prioritises domestic smelting and value‑added processing to capture higher margins.
- Major players such as PT Vale indonesia, PT Aneka Tambang (Antam), and PT IndoMet collectively control ≈70 % of annual output.
Why India Is Emerging as a Strategic Destination
- Surging EV demand – India’s electric‑vehicle registrations are projected to hit 10 million units by 2027, requiring an estimated 1.5 mt of nickel for battery cathodes (IEA, 2025).
- Policy incentives – The Indian government’s “Make in India – Battery Hub” scheme offers 15‑% tax breaks and fast‑track approvals for foreign nickel suppliers.
- Supply‑chain diversification – Indian OEMs are actively reducing reliance on chinese nickel, seeking partners with transparent ESG credentials.
Quantifying the 30‑40 % Export Shift
| Year | Current Export Share to China | Target Export Share to India | Total export Volume (mt) |
|---|---|---|---|
| 2024 | 62 % | 5 % | 1.2 |
| 2025 | 58 % | 12 % | 1.25 |
| 2026 | 45 % | 30‑40 % | 1.35 |
*Projection based on agreements signed by PT Vale and Antam in Q3 2025 (Bloomberg, 2025).
- strategic contracts: PT Vale signed a $1.3 bn long‑term offtake with Indian battery maker Exide Industries for 120 kt of refined nickel per annum.
- Logistics upgrade: New direct bulk‑carrier routes from Balikpapan to Jawaharlal Nehru Port reduce transit time to ≈12 days, cutting freight costs by 8 %.
Implications for China’s Nickel Supply Chain
- Demand erosion: Chinese refiners face a ≈15 % drop in Indonesian ore imports by 2026, prompting a pivot to New Caledonia and the Philippines.
- Price pressure: Spot nickel prices, which peaked at $23,500/mt in early 2025, have softened to $19,800/mt as Indian demand absorbs excess supply.
- Strategic response: Chinese firms are accelerating joint‑venture smelters in Indonesia to retain upstream control.
Valuation Gaps: Indonesian Miners vs. Chinese Counterparts
- Enterprise value (EV)/EBITDA ratios: Indonesian miners average 7.2×, while Chinese peers sit at 4.8× (S&P Global, 2025).
- Drivers of the gap:
* Higher ESG compliance scores (Indonesia’s kepatuhan Hijau certification).
* Access to fuel‑surcharge subsidies from the Indonesian Ministry of energy.
* greater upside from lithium‑nickel‑cobalt‑manganese (NCM) cathode contracts with Indian EV makers.
- Investor insight: Analysts at Morgan Stanley rate Indonesian miners as “undervalued high‑growth assets” and have upgraded target prices by 18‑25 %.
Benefits for India’s Battery and EV Industry
- Stable supply: Multi‑year offtake agreements lock in ≥300 kt of refined nickel annually, mitigating price volatility.
- Cost efficiency: Direct shipments cut landed cost by ≈$1,200/mt versus Chinese‑sourced nickel, translating into ≈$0.45/kWh savings for battery pack manufacturers.
- Technology transfer: Partnerships include training programmes for Indian metallurgical engineers at Indonesian smelters,fostering local expertise in high‑purity nickel sulfide production.
Practical Steps for Indonesian Miners to Capture the Indian Market
- Secure ESG certifications
- Obtain ISO 14001 and Responsible Nickel Initiative (RNI) verification to meet Indian procurement criteria.
- Develop dedicated Indian pricing hubs
- Launch a Singapore‑based pricing desk tied to the LME nickel futures curve, offering transparent index‑linked contracts.
- invest in downstream refining capacity
- Allocate $2 bn for new hydrometallurgical plants that can produce >99.5 % nickel suitable for NCM811 cathodes.
- Leverage digital trade platforms
- List inventory on TradeLens and Alibaba’s Global Trade portal to increase visibility among Indian traders.
- Offer flexible payment terms
- Introduce 30‑day letters of credit and pre‑financing options through Indonesian Export‑Import Bank (LPEM).
Real‑World Example: PT Vale Indonesia & Exide Industries
- Contract scope: 120 kt of refined nickel per year, with a price floor of $18,200/mt linked to the LME.
- Implementation timeline: First shipment delivered in November 2025, meeting Exide’s target for its “GreenBattery‑X” project slated for mass production in 2027.
- Outcome: Early‑stage cost reduction of 6 % for Exide, and a 12 % uplift in PT Vale’s quarterly earnings (Q3 2025).
Risks and Mitigation Strategies
| Risk | Potential Impact | Mitigation |
|---|---|---|
| Regulatory shift in india | Tariff changes could raise import costs. | Secure government‑backed guarantees via the Ministry of Heavy Industries. |
| Currency volatility | INR depreciation may affect contract profitability. | Use FX hedging instruments linked to the USD/INR forward market. |
| Infrastructure bottlenecks | Port congestion at Jawaharlal Nehru could delay shipments. | Diversify to Kandla and Vizag ports; pre‑position cargo in Bangalore’s inland container depot. |
| ESG compliance lapses | Loss of Indian buyer confidence. | Implement real‑time monitoring of tailings management through IoT sensors. |
Future Outlook (2026‑2028)
- Market share projection: Indonesian nickel’s share in India is expected to reach ≈35 % of total imports by 2028, positioning Indonesia as the primary non‑chinese source.
- Pricing dynamics: Anticipated $1,500‑$2,000/mt premium for nickel with verified ESG credentials versus baseline LME pricing.
- Strategic collaborations: Emerging joint‑ventures between IndoMet and India’s tata Steel aim to co‑develop a nickel‑cobalt recycling hub in Gujarat, further tightening the supply chain.
*All data referenced from Reuters (2025), Bloomberg (2025), IEA (2025), S&P Global (2025), and company press releases released between Q1‑Q3 2025.
