In the first half of 2025, Indonesia—long known for its sprawling coal industry—saw a remarkable transformation: nickel dethroned coal as its most lucrative export, signaling a dramatic shift in the nation’s economic landscape.
The Numbers Tell the Story
According to analysts at Macquarie Group, Indonesia earned $16.5 billion from overseas nickel-related sales during the first half of 2025, outpacing coal exports, which brought in $14.4 billion during the same period. This milestone marks the first time nickel has claimed its place at the summit of Indonesia’s export economy.
Nickel now represents about 12% of the country’s export revenue, moving beyond its previous role as a complementary resource to coal.
How Did This Transformation Happen?
The turning point began in 2020, when the Indonesian government implemented a complete ban on nickel ore exports. This bold strategy forced mining firms to invest in onshore smelting and refinement, effectively building an industrial backbone for higher-value product exports. The policy spurred massive Chinese investment in domestic infrastructure, and today Indonesia is estimated to control a dominant share—roughly 60% or more—of global nickel supply.
Coal’s Parallel Decline
Coal has faced growing headwinds. Oversupply, falling prices, and waning demand—especially from major buyers like China and India—have stunted earnings. In fact, coal remains Indonesia’s export powerhouse in name alone, with annual revenue around $30 billion in 2024, but the recent downturn underscores its weakening grip on the economy.
Key markets that once fueled coal demand are shifting toward renewable energy sources, while nickel’s rise is intricately tied to booming EV battery growth and the global energy transition narrative.
Broader Impacts of the Nickel Surge
- Economic Evolution: Nickel’s new prominence boosts government revenues not just through mining royalties, but also through higher-value processes and downstream industries, including stainless steel and battery materials.
- Market Dynamics: While higher nickel volumes have helped, prices remain depressed—down about 30% since mid-2024—reflecting a global oversupply exacerbated by rapid industrial growth.
- Strategic Positioning: Indonesia now plays a central role in global supply chains for clean energy technologies. With major smelting centers like Morowali Industrial Park (employing tens of thousands and serving as a hub for Chinese-backed facilities), Indonesia is a powerhouse in both stainless steel and battery precursor production.
- Environmental & Social Concerns: The fast-tracked growth raises sustainability alarms—issues like deforestation, coal-fired pollution, and worker safety (with reported industrial accidents) loom large. Environmental groups and international stakeholders are increasingly urging Indonesia to pursue cleaner production and tougher oversight.
Summary Table
| Topic | Key Takeaway |
|---|---|
| Export Earnings | Nickel earnings polled at $16.5 b over H1 2025, topping coal’s $14.4 b |
| Policy Shift | Nickel ore export ban in 2020 sparked domestic smelting investment |
| Global Influence | Indonesia now commands ~60% of global refined nickel supply |
| Coal’s Weakness | Coal export values declining amid demand drop and rising clean energy pressures |
| Challenges Ahead | Price decline, environmental strain, and potential regulatory backlash |
