Chinese Investors Complain About Indonesia's Nickel Policies, Deem Them a Threat to Investments

Several Chinese companies operating in Indonesia have warned that policies tightening nickel ore quotas, tax increases, and changes to the nickel pricing formula could threaten the investment climate in Indonesia as the world’s largest nickel producer. Citing Reuters on Thursday (14/5/2026), the Chinese Chamber of Commerce in Indonesia expressed concerns in a letter to President Prabowo Subianto regarding the rising operational costs due to the Indonesian government’s new policies. Five sources familiar with the letter confirmed its existence to Reuters, but requested anonymity as they were not authorised to speak publicly. The complaints reflect increasing tensions between the Indonesian government’s efforts to gain greater added value from natural resources and the interests of Chinese investors who have been the driving force behind the expansion of the national nickel downstream industry. The main focus is on the nickel sector, where Chinese companies dominate the downstream processing industry through major investments in smelters, stainless steel plants, and electric vehicle battery material projects. The chamber stated that this year’s nickel ore mining quota has been sharply reduced. For large-scale mines, the quota reduction is said to exceed 70%, while the national total reduction is estimated at 30 million tonnes. In addition, they criticised the revision of the benchmark mineral price (HPM) formula for nickel ore, which is seen as increasing production costs and potentially disrupting ongoing projects as well as new investment plans. President Prabowo on Wednesday (13/5/2026) also highlighted the numerous complaints from foreign investors regarding the slow and complicated licensing process in Indonesia. He called for deregulation to accelerate investments, though he did not mention any specific country. Reuters reported that major Chinese companies such as Tsingshan Group, Zhejiang Huayou Cobalt, and Brunp are members of the board of the Chinese Chamber of Commerce in Indonesia and have nickel processing facilities in the country.