Kadin and Mining Business Association Respond to Complaints from Chinese Businesses Regarding Indonesian Nickel
KONTAN.CO.ID - JAKARTA. The Indonesian Chamber of Commerce (Kadin) and mining business associations have responded to complaints from the China Chamber of Commerce regarding challenges faced by businesses in the upstream and downstream nickel sectors. The China Chamber of Commerce in Indonesia had previously sent a letter to President Prabowo Subianto regarding the challenges facing businesses in Indonesia.
In a widely circulated copy of the letter, Chinese business representatives highlighted government policies related to the mineral mining sector, particularly concerning nickel. The “Kadin” of China complained about increased taxes and levies, including royalties, regulations on the use of Export Earnings (DHE), reductions in nickel ore production quotas, and the new Mineral Reference Price (HPM) formula.
The Deputy Chairman of Kadin Indonesia’s Coordinating Board for Organization, Communication, and Regional Empowerment, Erwin Aksa, stated that the concerns raised by the China Chamber of Commerce should be understood as part of the dynamics of investment and industrialization, which are rapidly developing. On the other hand, Indonesia holds a very strategic position in the global nickel supply chain.
Erwin highlighted that policies such as DHE for Natural Resources (SDA), HPM for nickel, licensing, and industrial governance will be important considerations for investors. These factors directly relate to business planning and the economics of long-term projects.
“Kadin believes that open communication between the government and businesses, including foreign investors, is crucial to ensure that strategic national policies continue without reducing Indonesia’s investment appeal. What needs to be maintained is a balance between national interests, the sustainability of downstream industrialization, and certainty in the business climate,” said Erwin to Kontan.co.id on Sunday (May 17, 2026).
Erwin emphasized that concerns about regulatory certainty are not only felt by foreign investors but also by domestic businesses. Therefore, the business community hopes that every strategic policy can be implemented consistently, measurably, and provide sufficient room for adaptation for the industry.
In a widely circulated copy of the letter, the China Chamber of Commerce in Indonesia highlighted the reduction in nickel ore production quotas, with reductions exceeding 70% for large mines. The total decrease in production reaches 30 million tons, which could disrupt the development of downstream industries.
Additionally, the Ministry of Energy and Mineral Resources (ESDM) has issued a new HPM formula, causing the cost of nickel ore to increase by up to 200%. As the largest investors and operators in Indonesia’s nickel industry, Chinese companies are now facing sharp increases in production costs, operational losses, and imbalances throughout the supply chain.
“This will not only damage existing projects but also affect future investments, exports, and jobs for more than 400,000 people along the industrial chain, weakening global investor confidence in Indonesia’s nickel sector,” wrote the China Chamber of Commerce in Indonesia.
Notes from Nickel Entrepreneurs and Mining Practitioners
The Chairman of the Indonesian Nickel Industry Forum (FINI), Arif Perdana Kusumah, stated that Chinese investors currently dominate investments in the nickel industry in Indonesia, especially in downstream nickel processing based on Rotary Kiln Electric Furnace (RKEF) and High Pressure Acid Leaching (HPAL) technology. If examined in detail, Arif believes that the complaints from Chinese entrepreneurs reflect what is happening and being faced by the nickel industry in general, including domestic businesses.
“In our opinion, the complaints from the China Chamber of Commerce, which represents Chinese entrepreneurs, should be addressed wisely. The main point is the complaint about the investment climate. Many regulatory changes are increasing uncertainty for businesses in Indonesia,” said Arif to Kontan.co.id on Thursday (May 14, 2026).
In the current situation, business actors hope that the government can adapt and respond to global dynamics, especially regarding energy and supply chains. Arif hopes that the government can review or reassess policies that could create additional pressure on the industry.
“The business community fully supports the downstream industrialization agenda. However, stronger synergy is needed to ensure that the industry not only survives but also remains competitive in the face of increasingly complex global pressures,” said Arif.
The Chairman of the Mining Committee for Energy and Mineral Resources at the Indonesian Employers Association (Apindo), Hendra Sinadia, added that the complaints conveyed by the China Chamber of Commerce have also been voiced by various industrial and professional associations in the mineral and coal mining sector. On one hand, Apindo understands the conditions faced by the government, which is trying to maximize state revenue, including from the mineral mining sector.
Moreover, this sector is a mainstay, triggering dynamic policy changes that impact businesses. However, on the other hand, Apindo reminds the government to also consider aspects of business continuity and the investment climate, especially in the face of current global economic and geopolitical challenges.
In difficult conditions, Hendra emphasized that business actors need support for regulatory certainty that considers aspects of business continuity.
“High operational costs due to changes in various regulations need to be a concern for the government so that businesses can continue to contribute to state revenue and job creation,” said Hendra.
The Chairman of the Indonesian Mining & Energy Forum (IMEF), Singgih Widagdo, believes that several government policies are good in concept.