In this report published by the Energy Shift Institute, authors Ahmad Zuhdi D.K., Ian Hiscock, and Rizky A. Abietto critique Indonesia’s nickel downstreaming policy. While the country has successfully forced shallow smelting operations onshore to capture over 60% of the global nickel supply, it functions primarily as an “enclave economy” lacking mid-tier fabrication capabilities. Consequently, Indonesia remains dependent on foreign imports for finished goods. The authors advocate for an urgent policy shift to support tier-2 conversion manufacturing, which would boost domestic supply chains, create higher employment, and shield the local economy from global commodity cycles.
