Nickel Downstreaming Transforms North Maluku’s Economic Structure

North Maluku’s changing economic structure is increasingly evident in the growing contribution of mineral-processing industries to the regional economy. The sector now accounts for nearly half of regional gross domestic product (GRDP), marking a shift from raw-material mining towards mineral-based manufacturing.

Investment and Downstreaming Minister and Investment Coordinating Board (BKPM) Head Rosan Roeslani described the development at the groundbreaking and commercial launch of 11 nickel-downstreaming ecosystems, alongside the first export of electric-vehicle batteries, at the Weda Bay Industrial Estate in Central Halmahera, North Maluku, on Thursday, 8 October 2026.

According to Rosan, the strengthening manufacturing sector has made the province one of the largest nickel-processing centres in eastern Indonesia. The shift is linked to the government’s policy of ending exports of raw ore, which has been in effect for several years.

Rosan explained how processing industries have changed the region’s economy.

“Processing industries in North Maluku contribute nearly half of the province’s GDP. The province is no longer merely a mining area; it has become an industrial region,” Rosan said.

The development of mineral-processing industries has also affected regional trade performance. Growing manufacturing activity has increased trade value, particularly through exports of processed products.

Rosan said North Maluku’s trade surplus had risen sharply, reaching Rp31.1 trillion in 2025.

The province’s export mix has also changed from a pattern that relied on shipments of raw mining products. Processed nickel and derivative mineral products now dominate shipments from ports in North Maluku.

These export commodities include ferronickel, nickel matte, MSP (mixed sulphide precipitate), nickel sulphate and cobalt.

Rosan described the composition of exports in his presentation to the President.

“These exports are dominated by processed nickel products: ferronickel, nickel matte, MSP (mixed sulphide precipitate), nickel sulphate and cobalt, Mr President,” he said.

Empowering communities around industrial estates

Investment growth in North Maluku has also been accompanied by community empowerment programmes run by companies managing industrial estates. Corporate social responsibility (CSR) activities are directed towards villages around industrial and mining operations.

Rosan said the programmes had reached 32 villages in the areas surrounding industrial and mining sites. Companies’ spending on community empowerment had also exceeded Rp600 billion.

“Their CSR programmes have reached 32 villages around industrial and mining sites through community empowerment initiatives, and they have spent more than Rp600 billion,” Rosan added.

This contribution shows that industrial-estate development is not only about increasing production capacity. Investment activity is also accompanied by programmes targeting communities near mining and mineral-processing sites.

The government regards the connection between manufacturing and community empowerment as important to sustaining investment. Industrialisation is also expected to spread economic growth more widely beyond Java.

Rosan stressed that mineral processing is part of a broader industrialisation process.

“As you have said, Mr President, downstreaming ultimately leads to industrialisation. The presence of industrial estates not only changes the structure of regional GDP, but also concretely promotes a more even distribution of economic growth outside Java,” he concluded.

Developing the electric-vehicle battery ecosystem

The strengthening of Indonesia’s nickel industry is also linked to the development of an electric-vehicle (EV) battery supply chain. This includes mineral processing, battery-material production, cell manufacturing, supporting components and recycling facilities.

Several of these industrial activities are concentrated in nickel-based areas, including the Indonesia Weda Bay Industrial Park (IWIP) in Central Halmahera, North Maluku, and the Indonesia Morowali Industrial Park (IMIP) in Central Sulawesi.

Both estates play a role in developing the battery industry because they are connected to the processing of minerals used as raw materials. The government is also promoting projects to build battery-material and supporting-component facilities through various downstreaming initiatives.

Indonesia’s battery-cell production sector includes PT HLI Green Power, which operates in Karawang, West Java. The company, a joint venture between Hyundai Motor Group and LG Energy Solution, has an annual production capacity of 10 GWh.

Another facility is PT Contemporary Amperex Technology Indonesia Battery (CATIB) in Karawang. It is being developed through a partnership between PT Industri Baterai Indonesia (IBC) and the CATL consortium.

The two companies are strengthening domestic battery-cell production capacity. Industrial development also encompasses several key materials required to manufacture EV batteries.

Battery materials and recycling industries

The development of battery-related materials involves several companies with different areas of production. PT Guang Ching Nickel Cobalt is developing nickel-based materials, while PT Inno Prima Material is working on battery separators.

PT Tinci Materials Indonesia, meanwhile, is developing battery electrolyte materials. These companies are expanding the stages of manufacturing that can be carried out domestically.

PT Industri Baterai Indonesia (IBC) also plays a role in coordinating the development of the national battery supply chain. Its remit covers various stages of the industry, from upstream activities to downstream operations.

Alongside production, the development of recycling facilities is another part of building the battery ecosystem. These facilities are needed to reprocess materials recovered from used batteries.

Recycling means the industrial supply chain is not focused solely on sourcing raw materials and producing new batteries. Material recovery is also becoming part of the industry’s development.

Indonesia’s battery ecosystem and nickel downstreaming still require the full optimisation of production facilities. Each stage of industry must operate at full capacity, meet global industry standards and support the creation of a sustainable export market.

North Maluku’s industrial development demonstrates a shift from exporting raw mining products towards producing higher-value processed minerals. The processing sector’s contribution to GRDP, the Rp31.1 trillion trade surplus in 2025 and empowerment programmes in 32 villages are all part of this transformation.