How China Came to Dominate the World’s Largest Nickel Source for Electric Cars
Across the Indonesian archipelago, new industrial plants are going up to process chunks of nickel ore for use in electric-car batteries. Five years ago, there were none. What changed? Chinese companies had a breakthrough.
They tamed a refining process that was once unwieldy, unlocking Indonesia’s expansive deposits for the nickel-hungry EV industry. In doing so, they established Chinese dominance over what has grown into the world’s largest source of the commodity. That gives China a leg up in the global race to secure minerals that are critical to the energy transition and is a blow to U.S.
efforts to lessen American companies’ dependency on China. The Biden administration is pushing hard to diversify energy supply chains. But with nickel, Chinese companies are tightening their grip.
Beijing’s recent decision to impose export restrictions on gallium and germanium—two metals with key uses in semiconductors—underscores the potential risks of relying on China for crucial inputs. Companies from China have set up at least three EV-focused processing plants in Indonesia in recent years and others are on the way. One planned facility drew investment from Ford Motor earlier this year, while another is being built by South Korean steel giant Posco Holdings.
Both involve Chinese companies. Indonesia has gone from being a marginal supplier of nickel for vehicle batteries in 2017 to the top source, accounting for around half of global supply in 2022, according to CRU, a commodities business-intelligence firm based in London. That number is likely to rise.
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