Indonesia's Misfortune with its Nickel

There is a pattern in history that is too consistent to be called coincidence: countries rich in natural resources but politically weak almost always end up in the same condition—they mine for others. Iran experienced it with oil. Indonesia experienced it with gold, copper, and nickel—and in some ways, it is still experiencing it today. The parallel between the two countries is not mere rhetoric. It is a structural mirror worth facing honestly. Iran’s story began with William D’Arcy and the 1901 oil concession—an exclusive right granted to foreigners over resources lying far beneath Iran’s own soil. For five decades, Iran’s oil flowed out, and the profits flowed to London. When Prime Minister Mohammad Mossadegh nationalised oil in 1951, the Western response did not come through negotiation—but through blockade and, two years later, a coup. The CIA officially acknowledged its role in that coup only in 2013. This is documented in the Encyclopedia Britannica. Indonesia’s story was written differently, but it ended with similar logic. Sukarno, known for firmly rejecting foreign capital dominance and demanding fair terms from Western companies, suddenly was no longer in power. On 7 April 1967, less than a month after Soeharto became Indonesia’s second president, Freeport Sulphur of Delaware signed a work contract with the Indonesian government for copper mining in West Papua. That contract was on highly unequal terms. If Sukarno demanded that the Caltex oil mining company share 60 percent of the proceeds with Indonesia, Soeharto agreed to only 9.6 percent from copper—while for gold, silver, and two other minerals; all free for the United States. It is no coincidence that from that first contract, Freeport McMoRan holds 90.64 percent shares and the government only 9.36 percent. (Lapham’s Quarterly) This time, there is no CIA officially acknowledging a role in the change of power in Indonesia. However, the structural pattern is identical: a nationalist leader who wants to demand sovereignty over his natural resources is sidelined, and his successor opens the doors wide for foreigners. The difference between Iran and Indonesia lies in how they responded. Iran chose total confrontation—nationalisation, revolution, and ultimately a theocracy born from the people’s anger betrayed for two decades by the CIA-backed Shah Pahlavi. The result brought economic sanctions, international isolation, and military resurgence. Indonesia chose a longer and slower path. Negotiations dragged on for years, with pressure and gradual divestment. The result is better legally, but not always more dignified.