In Les Echos
In 2014 Indonesia banned exports of its nickel ore to China. The producer accounted for 28% of the world supply before the boycott and 8% thereafter. Why this embargo? Indonesia wanted to build a local nickel processing industry instead of exporting raw ore to Beijing!
In 2018, Indonesia more than met its challenge. Not only has the country once again become the world’s leading producer and nickel is refined down the mines on Indonesian soil, but also ex nihilo a steel industry has been built downstream of the mines and stainless steel is produced in Indonesian factories.
As soon as its steel mills reach full capacity in 2019, the country will produce just less than 3 million tons per year, but its exports, particularly to China, will place it world top stainless steel exporter.
Chinese industry is to be credited of the success. It was she who set up next to the mines and financed the whole thing.
But, Chinese entrepreneurs did not stopped there. In 2018, in parallel with the steel mills, they invested in another nickel processing plant, nickel for batteries. This requires a purity and form of nickel that is more elaborate than that produced for stainless steel.
This upmarket move also applies to cobalt, as Indonesian nickel ore contains cobalt. Cobalt cells will leave the same plant to supply the Chinese battery industry.
This example of positive resource nationalism is that of an optimized Metal Doctrine, as it is focused on economic development and jobs rather than that of a narrow and political mining rent.
How can we not draw a parallel between Indonesian nickel and copper-cobalt from the DRC, between Chinese steelmakers in Indonesia and perhaps one day Chinese battery module manufacturers in Kolwezi and Lubumbashi? To be continued!
Published on Les Echos 31 10 2018