Antara News·Indonesia·Monday, October 12, 2026 at 09:19 AM UTC

From raw ore to EV power: Indonesia's US$10 bln nickel transformation

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Aditya Ramadhan, Yashinta Difa

Jakarta (ANTARA) - The piercing sound of a siren cut through the air at the Indonesia Weda Bay Industrial Park in Central Halmahera on October 8, 2026.

That sharp sound marked the moment a long-held vision broke out of planning documents and into reality. Electric vehicle (EV) batteries—manufactured in the heart of Indonesia’s nickel region—were officially shipped off to international markets.

President Prabowo Subianto himself activated the siren. With that simple gesture, he inaugurated the commercial operations of four major industrial projects and broke ground on seven new ones.

Together, these eleven ventures represent a combined investment value of US$10.2 billion.

While the total investment amount is massive, the strategic nature of the projects carries even greater weight. The four facilities entering full commercial operations are Blue Sparking Energy, REPT Battero Indonesia, Pioneer Aluminium Industries and XCMG Indonesia Manufacturing.

Meanwhile, the seven facilities entering construction focus on nickel-based battery materials, separators, electrolytes, electrolytic aluminum, electric trucks for industrial use and photovoltaic glass for solar panels.

Taken together, these facilities establish an almost complete production chain—stretching from raw battery chemicals to the final electric vehicles that run on them.

The full impact of the event at Weda Bay becomes clear when looking back at recent history.

Before the nationwide nickel ore export ban took effect in 2020, Indonesia sold most of its mineral wealth abroad as raw earth. Data from the Ministry of Energy and Mineral Resources shows that export revenue from nickel and its derivatives stood at just US$3.3 billion in2017.

By 2024, that figure skyrocketed to US$33.9 billion, marking a more than tenfold rise for a nation that controls roughly 42 percent of global nickel reserves.

This massive transformation did not happen overnight. The initial phase focused on building domestic smelters to process raw ore into ferronickel and nickel pig iron for global stainless steel production.

The second phase moved into intermediate goods, such as nickel matte, mixed hydroxide precipitate, nickel sulfate and cobalt—which now power the substantial trade surplus in North Maluku province.

The third and final phase turns those intermediate products into complete battery components. Batteries represent the final step before assembling the electric vehicles themselves.

Each step up this ladder fundamentally changes the nature of what Indonesia sells to the world.

Raw ore is traded strictly on tonnage and grade, with prices set by international metal exchanges.

Advanced batteries, however, are sold on technical specifications: energy density, cycle life, safety features and the trust of global vehicle manufacturers.

At this advanced manufacturing stage, product pricing depends less on volatile commodity price swings and more on technology and industrial reputation. This shift in bargaining power forms the true core of Indonesia’s economic downstreaming policy.

Projects focused on battery separators and electrolytes fill a critical gap that previously left Indonesia’s battery ambitions incomplete.

Investment and Downstreaming Minister Rosan Roeslani noted that these facilities represent the nation's first separator plants.

Although smaller in physical scale than massive smelters, battery cells cannot function without them.

Rosan stressed that building a complete ecosystem—including end-of-life battery recycling—positions Indonesia firmly inside the global supply chain, rather than on its outer edges.

Heading to East

This rapid industrial growth is reshaping the economy of Eastern Indonesia, most visibly in North Maluku.

The province recorded the nation's highest economic growth rate in 2025 at 34.17 percent. It continued to lead the country in the second quarter of 2026 with a year-on-year growth rate of 15.35 percent.

Statistics Indonesia identified mineral processing as the principal engine behind these numbers, with Rosan adding that the processing industry now accounts for nearly half of the province's GDP.

The national economic picture reflects the same structural shift. The contribution of downstreaming projects to total national investment rose from 25 percent to 35 percent over the last two years, with more than 75 percent of those funds spent outside Java.

Indonesia’s economy, long concentrated on Java, is steadily moving its economic center toward the east, with Weda Bay serving as the clearest example.

Since 2018, the Weda Bay industrial zone has drawn roughly US$20 billion in investment, with another US$7 billion planned to bring the total to US$27 billion.

Fifty-two international companies, including global traders Glencore and Trafigura, operate within the park and employ a workforce of 117,000 people.

The industrial park generates US$11 billion in exports. Combined with the Morowali Industrial Park in Central Sulawesi, total exports reach US$28 billion, accounting for about 10 percent of Indonesia's national export earnings.

Two remote island industrial zones now deliver one-tenth of the nation's export revenue.

However, rapid expansion presents its own set of long-term economic questions. North Maluku Governor Sherly Tjoanda warned that such intense growth requires careful oversight because the local economy relies heavily on finite mineral extraction.

Her warning outlines a clear roadmap for policymakers. The best defense against over-reliance on raw mining is to move continuously higher up the industrial value chain.

As production extends further away from the mine pit, a larger share of economic value comes from human skills, advanced machinery and proprietary technology—assets that remain valuable long after underground reserves run dry.

Social development is also expanding alongside industrial output. Corporate social responsibility programs across the area now reach 32 local villages, supported by funding that exceeds Rp650 billion (approximately US$36.52 million). President Prabowo emphasized that industrial operators must continue actively supporting local communities.

Serving domestic market

Among the new groundbreakings, the photovoltaic glass plant holds particular strategic importance. This facility directly supports the 100-gigawatt-peak solar power initiative launched by the President in Gilimanuk, Bali, last August.

That three-year national energy project requires an estimated investment of Rp1,140 trillion (US$64.04 billion). Rosan confirmed that Tsingshan, the main developer of Weda Bay, has opened discussions with state investment body Danantara to participate in the solar plan.

Downstreaming at Weda Bay is moving beyond overseas exports to supply Indonesia's own domestic energy transition.

The industrial complex now produces solar panel glass, energy storage batteries and heavy electric trucks to replace diesel vehicles inside mining sites.

Industrial complexes that supply national clean energy needs build stronger insulation against international market swings.

President Prabowo noted that these achievements build upon decisions made by previous presidential administrations—forming part of a continuous national effort.

His statement highlights that effective industrial policy demands a timeline far longer than a single political term.

Indonesia's nickel strategy has navigated trade disputes at the World Trade Organization, commodity market swings and political transitions without losing focus.

That policy consistency gives international investors the confidence to fund projects that require over a decade to recoup their initial capital.

The initial shipment of battery components from Weda Bay marks a major turning point.

Indonesia has reached the top rung of the industrial downstreaming ladder.

The immediate priority moving forward is to ensure that national engineers, local businesses and researchers climb that same ladder—keeping the value created firmly inside the country.

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