Technological Resilience in Nickel Downstreaming: Energy Policy, Critical Material Security, and Indonesia's Transition to Battery Materials

Indonesia has emerged as a global centre of nickel downstreaming, transforming its role from a raw nickel ore exporter into a major producer of processed nickel products. However, the next stage of downstream industrialisation—particularly the development of a domestic electric-vehicle (EV) battery materials industry—raises new challenges concerning energy security, critical-input dependence, environmental sustainability, and geopolitical vulnerability. This study examines the strategic implications of alternative nickel-processing technologies through a qualitative Strategic Policy Assessment (SPA), comparing Rotary Kiln Electric Furnace (RKEF), High-Pressure Acid Leaching (HPAL), and the emerging Oxygen-Enriched Side-Blown Furnace (OESBF). The analysis evaluates these technologies across six dimensions of technological resilience: resource utilisation, energy and input requirements, critical-material and supply-chain security, environmental sustainability, industrial upgrading potential, and policy compatibility. The findings indicate that RKEF remains important for Indonesia's stainless-steel-oriented nickel industry but is highly energy-intensive and dependent on high-grade saprolite resources. HPAL provides a pathway to battery materials from limonite ores but introduces significant dependence on sulfuric acid and imported sulfur, creating new geopolitical and supply-chain vulnerabilities. OESBF, although still at an emerging stage, offers potential for technological diversification, reduced sulfur dependence, and greater flexibility in producing battery-related nickel intermediates. The study argues that Indonesia's future downstreaming strategy should move beyond capacity expansion and value addition toward a diversified technological portfolio that strengthens industrial competitiveness, energy security, environmental performance, and supply-chain resilience.

Keywords: Nickel downstreaming; technological resilience; energy security; critical minerals; OESBF; Indonesia

1. Andreoni, A., & Chang, H.-J. (2019). The political economy of industrial policy. Structural Change and Economic Dynamics, 48, 136–150. https://doi.org/10.1016/j.strueco.2018.08.001 [Google Scholar] [Crossref]

2. Asosiasi Penambang Nikel Indonesia. (2026). APNI report April 2026. https://www.apni.or.id/apni-report/april-2026 [Google Scholar] [Crossref]

3. Crundwell, F. K., Moats, M. S., Ramachandran, V., Robinson, T. G., & Davenport, W. G. (2011). Extractive metallurgy of nickel, cobalt and platinum group metals. Elsevier. [Google Scholar] [Crossref]

4. Fan, Q., Yuan, S., Wen, J., & He, J. (2024). Review on comprehensive utilization of nickel laterite ore. Minerals Engineering, 218, 109044. https://doi.org/10.1016/j.mineng.2024.109044 [Google Scholar] [Crossref]

5. George, A. L., & Bennett, A. (2005). Case studies and theory development in the social sciences. MIT Press. [Google Scholar] [Crossref]

6. Gereffi, G., Humphrey, J., & Sturgeon, T. (2005). The governance of global value chains. Review of International Political Economy, 12(1), 78–104. https://doi.org/10.1080/09692290500049805 [Google Scholar] [Crossref]

7. Humphrey, J., & Schmitz, H. (2002). How does insertion in global value chains affect upgrading in industrial clusters? Regional Studies, 36(9), 1017–1027. https://doi.org/10.1080/0034340022000022198 [Google Scholar] [Crossref]

8. International Energy Agency. (2023). Critical minerals market review 2023. IEA. [Google Scholar] [Crossref]

9. International Energy Agency. (2025). Global critical minerals outlook 2025. IEA. https://www.iea.org/reports/global-critical-minerals-outlook-2025 [Google Scholar] [Crossref]

10. International Energy Agency. (2026). Global EV outlook 2026. IEA. https://www.iea.org/reports/global-ev-outlook-2026 [Google Scholar] [Crossref]

11. Internal Revenue Service. (2024). Clean vehicle credits under sections 25E and 30D; transfer of credits; critical minerals and battery components; foreign entities of concern. Internal Revenue Bulletin, 2024-22. https://www.irs.gov/irb/2024-22_IRB [Google Scholar] [Crossref]

12. Liu, Y.-T., Yang, T.-Z., Chen, Z., Zhang, L., & Huang, Q. (2020). Experiment and numerical simulation of two-phase flow in oxygen-enriched side-blown furnace. Transactions of Nonferrous Metals Society of China, 30(1), 249–258. https://doi.org/10.1016/S1003-6326(19)65196-4 [Google Scholar] [Crossref]

13. McDonald, R. G., & Whittington, B. I. (2008). Atmospheric acid leaching of nickel laterites review: Part I. Sulphuric acid technologies. Hydrometallurgy, 91(1–4), 35–55. https://doi.org/10.1016/j.hydromet.2007.11.009 [Google Scholar] [Crossref]

14. Mudd, G. M. (2010). Global trends and environmental issues in nickel mining: Sulfides versus laterites. Ore Geology Reviews, 38(1–2), 9–26. https://doi.org/10.1016/j.oregeorev.2010.05.003 [Google Scholar] [Crossref]

15. Nugroho, H., Mendatu, A., & Muhyiddin, M. (2026a). Input security and industrial vulnerability: The impact of U.S.–Iran tensions on Indonesia’s nickel industry. American Journal of Energy and Natural Resources, 5(1), 8–17. https://doi.org/10.54536/ajenr.v5i1.7466 [Google Scholar] [Crossref]

16. Nugroho, H., Mendatu, A., Widiatmoko, U., & Muhyiddin, M. (2026b). From resource abundance to industrial constraint: Managing upgrading and structural dependencies in Indonesia's nickel value chain. International Journal of Research and Innovation in Social Science, 10(14), 1326–1339. https://doi.org/10.47772/IJRISS.2026.1014MG0098 [Google Scholar] [Crossref]

17. OECD. (2019). Global material resources outlook to 2060: Economic drivers and environmental consequences. OECD Publishing. [Google Scholar] [Crossref]

18. Ramadhani, E., & Paksi, A. K. (2025). The price of progress: An assessment of Indonesia's nickel downstreaming policy for the global energy transition. BIO Web of Conferences, 199, 02002. https://doi.org/10.1051/bioconf/202519902002 [Google Scholar] [Crossref]

19. United States Geological Survey. (2024a). Mineral commodity summaries 2024: Nickel. U.S. Geological Survey. [Google Scholar] [Crossref]

20. United States Geological Survey. (2024b). Mineral commodity summaries 2024: Sulfur. U.S. Geological Survey. [Google Scholar] [Crossref]

21. Widyastuti, N. L., Widiatmoko, U., & Nugroho, H. (2026). Downstream industrialization and the future of Indonesia's resource-based economy: Resource nationalism, value addition, and structural challenges. Jurnal Perencanaan Pembangunan: The Indonesian Journal of Development Planning, 10(1), 51–65. https://doi.org/10.36574/jpp.v10i1.836 [Google Scholar] [Crossref]

22. World Bank. (2020). Minerals for climate action: The mineral intensity of the clean energy transition. World Bank. [Google Scholar] [Crossref]

23. Yin, R. K. (2018). Case study research and applications: Design and methods (6th ed.). Sage Publications. [Google Scholar] [Crossref]

24. Zhang, Z.-F., Zhang, W.-B., Zhang, Z.-G., & Chen, X.-F. (2025). Nickel extraction from nickel laterites: Processes, resources, environment and cost. China Geology, 8(1), 187–213. https://doi.org/10.31035/cg2024124 [Google Scholar] [Crossref]

• Assessment of the Role of Artificial Intelligence in Repositioning TVET for Economic Development in Nigeria
• Teachers’ Use of Assure Model Instructional Design on Learners’ Problem Solving Efficacy in Secondary Schools in Bungoma County, Kenya
• “E-Booksan Ang Kaalaman”: Development, Validation, and Utilization of Electronic Book in Academic Performance of Grade 9 Students in Social Studies
• Analyzing EFL University Students’ Academic Speaking Skills Through Self-Recorded Video Presentation
• Major Findings of The Study on Total Quality Management in Teachers’ Education Institutions (TEIs) In Assam – An Evaluative Study