Get rid of the resource curse Indonesia's nickel Nirvana is good

Recently, at the China Battery Raw Materials Conference, the leading price reporting, analysis and conference organization for the global commodity market, Indonesia's Deputy Minister of Maritime Affairs Coordination Seto announced that Indonesia will have up to 2.2 million tons of nickel metal capacity in 2023, while capacity utilization will reach 75% to 79%. This data indicates that Indonesia's important position in the global nickel industry, its capacity and output are growing, will strongly promote the development of the global battery raw materials market.
In 1901, the discovery of a nickel ore on Mount Viebeck on the Indonesian island of Sulawesi determined the economic course of the country for more than 100 years. This "country of ten thousand islands", which connects the Indian Ocean and the Pacific Ocean and has a population of 276 million, is relying on this important mineral resource and has become a "honey and milk land" for many foreign enterprises and capital to rush into in the era of global energy transition and a "rising country" in the words of many economists.
According to PWC and the Economist Intelligence Unit, after 2050, the "little giant of Southeast Asia" will become the world's fourth-largest economy after China, the United States and India. Indonesia's nickel industry has been key to its explosive rise.
Nickel is one of the fifth most common elements on Earth, the content of about 3% on Earth, second only to iron, oxygen, silicon, magnesium, mainly used in stainless steel, electroplating and batteries and other production fields. With the vigorous development of the new energy automobile industry in recent years, the importance of nickel as a key material for the production of ternary lithium batteries has become increasingly prominent.
Indonesia is the world's largest nickel resource country and nickel producer, with huge nickel mining potential. According to the United States Geological Survey (USGS) statistics, in 2022, Indonesia's nickel reserves account for about 20.6% of the global total reserves, ranking first in the world; Nickel metal production reached 1.6 million tons, accounting for 48.8% of the global total.
However, rich mineral resources do not necessarily bring economic prosperity and social prosperity, on the contrary, it may bring the "curse" of resources and the contradiction of abundance, that is, a country because of excessive reliance on natural resources, and then fall into the low level of industrialization, the transformation of industrial structure is difficult, and over-reliance on a single economic structure.
In order to avoid the "curse" of resources, Indonesia has insisted on the implementation of the "downstream" resource economic policy (also known as downstream policy) in the past 10 years, trying to form a high value-added industrial ecosystem through economic transformation. The Indonesian government sees this policy as key to its ability to make the leap to developed country status.
Simply put, "downstream" is a policy that only allows refined metals to be exported. Its purpose is to promote the expansion of foreign investment in Indonesia's metals industry, through the establishment of a localized industrial system, to promote Indonesia to move up the global value chain, the production of higher value mineral products, so that Indonesia becomes an important player in the global commodity downstream industry. By implementing downstream policies in the nickel industry chain, the Indonesian government hopes to connect the nickel industry with the emerging electric vehicle industry, thereby expanding Indonesia's nickel product share in the global market, expanding the processing and production of high value-added products, and creating sustainable local employment opportunities.
Today, Indonesia has successfully got rid of the past nickel ore supplier mainly exported nickel ore raw materials, grew into the world's second largest stainless steel producer, and surpassed China to become the world's largest nickel iron supplier.
But there have been international doubts about Indonesia's rather nationalistic approach to managing its natural resources.
Under the favorable environment of increasing global demand for nickel, Indonesia no longer only puts the hopes of national economic growth in the production and export of nickel products in the basket, but aims to build a world center for battery and new energy vehicle manufacturing. In the next step, Indonesia plans to tilt the production of new energy battery raw materials in its industrial development policy, and plans to extend the layout of downstream industries.
There is no doubt that in the future, Indonesia will continue to firmly consolidate its position as the world's largest nickel producer, seize the opportunity of the global green energy transition, and transform the natural resource endowment into the industrial infrastructure and benign sustainable industrial ecology required for the modernization of the country. Some insiders believe that with the help of "nickel", Indonesia may become an economic power with important strategic resources in Southeast Asia in the era of carbon neutrality.