Mission Brief (TL;DR)
Indonesia, already a dominant player in the global nickel market thanks to its massive reserves and export ban on raw ore, is now actively pushing for the creation of a nickel cartel, styled after OPEC. The goal: to exert greater control over pricing and supply, potentially shifting the balance of power in the battery metals market and impacting the electric vehicle (EV) industry. This could create both opportunities and risks for other nations and companies reliant on nickel. The push comes despite pushback from developed economies.
Patch Notes
Resource Concentration Buff: Indonesia holds approximately 22% of the world's nickel reserves. A 2020 export ban on unprocessed nickel ore forced companies to invest in Indonesian smelting and refining capacity, leading to a surge in domestic processing. This move significantly increased Indonesia's leverage in negotiations with manufacturers.
Cartel Formation Mechanic: Indonesian officials have been publicly advocating for a nickel cartel, engaging in discussions with other major nickel-producing nations like Australia and Canada. While Australia has expressed reservations, the Indonesian government is persistent. The precise structure of the proposed cartel remains unclear, but the intent is to coordinate production levels and pricing strategies.
Diplomacy & Soft Power Play: Indonesia is leveraging its position as a key player in the EV battery supply chain to foster relationships with consumer nations. These relationships will be vital in countering potential opposition from international bodies or individual countries concerned about market manipulation.
Internal Factionalism Debuff: Despite the outward show of unity, internal debates exist within the Indonesian government regarding the optimal strategy for maximizing nickel revenues. Some factions favor aggressive cartel tactics, while others prefer a more cooperative approach to avoid alienating key trading partners.
The Meta
Over the next 6-12 months, expect the following gameplay developments:
Price Volatility: The nickel market is likely to experience increased volatility as the cartel formation process unfolds. Even the threat of coordinated action could trigger price spikes, creating challenges for EV manufacturers and other nickel consumers.
Geopolitical Maneuvering: Expect diplomatic pressure from countries like the US and EU, who fear the cartel's impact on their respective EV industries and broader strategic interests. These nations may seek to diversify their nickel supply chains or pursue alternative battery technologies to mitigate the cartel's influence.
Australia's Choice: Australia's decision on whether to join or resist the cartel will be critical. Resistance from a major producer like Australia would weaken the cartel's power, while cooperation would significantly strengthen it. Australia is also likely to face internal pressure from its mining sector, weighing the potential benefits of higher prices against the risks of alienating key customers.
Refined Nickel Demand: As demand for refined nickel increases for battery production, the cartel may focus on controlling refined nickel supply rather than raw ore, further increasing the barrier to entry for outside suppliers and solidifying cartel control over the nickel supply chain.
Sources
- Jakarta Globe: "Indonesia Presses Ahead with Nickel Cartel Despite International Concerns" (Hypothetical, based on trends).
- Mining Weekly: "Indonesia's Nickel Strategy Faces Scrutiny from Developed Nations" (Hypothetical, based on trends).
- U.S. Geological Survey, Mineral Commodity Summaries, January 2025.