Nickel Downstream Processing for EV Batteries
Geography: Asia Pacific · Southeast Asia · Southeast Asia
Indonesia — Indonesia's 2020 raw nickel ore export ban is the most consequential resource nationalism policy in the battery era. By 2025, five High Pressure Acid Leaching (HPAL) plants are operational, converting low-grade limonite ore into mixed hydroxide precipitate (MHP) and nickel sulfate — the precursors for EV battery cathodes. This forced Chinese, Korean, and Japanese companies to build processing facilities in Indonesia rather than extracting raw materials.
The results are mixed: stainless steel downstream development succeeded spectacularly (Indonesia became the world's largest producer), but battery-grade processing faces environmental challenges. HPAL plants generate toxic tailings, and the energy-intensive process often relies on coal power, undermining the green credentials of the final EV batteries.
Strategically, Indonesia controls approximately 50% of global nickel reserves. The downstream processing mandate is an attempt to capture more value from this resource advantage before battery chemistry shifts (sodium-ion, LFP) reduce nickel demand. If Indonesia can solve the environmental challenges and move further downstream into cathode manufacturing, it becomes indispensable in the EV battery supply chain.
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