Indonesia has become the reference case for resource nationalism done deliberately. After banning exports of unprocessed nickel ore on 1 January 2020, the country transformed itself into a leading producer and exporter of processed nickel products, and in 2026 Jakarta is pressing that advantage, targeting billions of dollars in fresh mining and processing investment.
From raw ore to refined products
The logic of Indonesia's downstreaming policy is straightforward: capture the value that once flowed abroad. By forcing minerals to be processed domestically, Indonesia attracted smelters, refineries and battery-material plants, generating jobs and export revenue far beyond what raw ore sales delivered.
The strategy has reshaped global nickel markets and made Indonesia central to the supply chains behind stainless steel and electric-vehicle batteries. It has also become a model studied by other mineral-rich governments.
The 2026 investment push
Jakarta has set ambitious targets for foreign investment in mining and processing, with figures cited around $21.3 billion for mining and processing projects. The aim is to deepen the domestic value chain further, moving beyond intermediate products toward higher-value battery materials and components.
- Indonesia banned unprocessed nickel ore exports on 1 January 2020.
- The country became a leading exporter of processed nickel products.
- Jakarta is targeting roughly $21.3 billion in mining and processing investment.
- The model is now widely cited by other resource-rich nations.
Benefits and frictions
Downstreaming has delivered clear economic gains, but it has drawn scrutiny too. Trading partners have questioned the export restrictions, and environmental and governance concerns have accompanied the rapid build-out of processing capacity. Balancing growth with sustainability standards remains a live challenge.
There are also questions about supply and pricing. As Indonesian output has expanded, it has influenced global nickel prices, at times pressuring higher-cost producers elsewhere and complicating the economics of new projects.
A magnet for supply diversification
Indonesia's processing capacity makes it a natural partner for economies seeking to diversify critical mineral supply chains. Discussions around a US-Indonesia critical minerals arrangement have highlighted the potential to raise environmental standards and broaden secure supply, though the details of any framework carry their own complexities.
Why it matters globally
Indonesia's trajectory shows that a determined policy of value addition can rewire a country's place in global trade. For governments across Africa, Latin America and Asia weighing similar bans on raw exports, Jakarta offers both inspiration and a cautionary lesson about the investment, infrastructure and standards required to make downstreaming succeed.
As demand for battery minerals climbs through the decade, Indonesia's early bet on processing positions it to remain a pivotal node in the electrification economy, provided it can attract the capital and manage the environmental trade-offs its expansion entails.