Jakarta. Indonesia and China are in talks to build a research and development center dedicated to nickel processing, as Jakarta tries to capture more value out of its minerals.

Chief Economic Affairs Minister Airlangga Hartarto announced the possible partnership in a press statement following his recent meeting with Chinese Ambassador to Indonesia Lu Kang. A ministerial press statement revealed that the establishment of the nickel processing R&D center would likely involve Yogyakarta-based Gadjah Mada University (UGM) and Chinese battery metals producer CNGR. 

“Minister Airlangga [told the ambassador] that he would explore the possibility of the UGM and CNGR to work together on the R&D center. The CNGR is a Guangxi-based company that boasts state-of-the-art technologies in nickel processing,” the press release reads.

The release did not go into further details on the potential partnership between UGM and CNGR. The company already has an industrial base in Morowali which began producing nickel matte in 2022. CNGR’s facility in Weda Bay has also entered the production stage.

China has always been among Indonesia’s top foreign investors. Government data show that Indonesia racked up $1.87 billion in foreign direct investment (FDI) coming from China in the first quarter of 2024. China came third in Indonesia’s foreign investor ranking for the said period -- with Singapore ($4.2 billion) and Hong Kong ($1.89 billion) claiming the first two spots.

Indonesia is trying to get institutions -- be it from home and abroad -- to invest in its domestic processing of nickel and other raw materials. In the first three months of 2024, Indonesia recorded Rp 43.2 trillion ($2.9 billion) in investments related to mineral smelting. About Rp 33.4 trillion went to the nickel smelting. Some Rp 8.4 trillion were copper smelting investments with the remaining Rp 1.4 trillion going to the bauxite industry.

According to the 2024 US Geological Survey report, Indonesia boasts the world’s largest nickel reserves, reaching 55 million metric tons. Indonesia’s nickel mines produced an estimated 1.8 million metric tons throughout 2023. Nickel is a mainstay in the production of electric vehicle (EV) batteries.