Critical Minerals & The Modern World – Nickel
Avi Sheshachalam
Innovation. Partnership. Strategy
December 9, 2025
Read Part 1 (Lithium) and Part 2 (Cobalt) here.
A Leadership Lunch That Shifted My Thinking
I began thinking differently about nickel during a lunch hosted through the Aga Khan Foundation Canada Global Leadership Program. My cohort and I sat with His Excellency Muhsin Syihab, Ambassador of Republic of Indonesia to Canada, and the conversation moved across climate finance, international carbon markets, and regional diplomacy.
But the point that stayed with me was Indonesia’s ongoing challenge as a vast archipelago of nearly 17,500 islands: how to move people and resources across fragmented geography while ensuring that economic development does not undermine environmental stability or local livelihoods.
Nickel Before Nickel Had a Name
Long before it was identified as a chemical element, nickel quietly shaped human history. Ancient bronzes from China and the Middle East contain nickel-rich ores, and Chinese artisans produced a bright, silver-coloured alloy called paktong centuries before metallurgy caught up. It wasn’t until 1751 that Swedish chemist Axel Fredrik Cronstedt isolated nickel and realised that miners had been handling it unknowingly for generations. Since then, nickel has become essential to stainless steel, shipbuilding, aerospace materials, and now to the modern battery chemistries that make electrification possible.
Indonesia’s Geography and Its Nickel Advantage
Indonesia holds nearly 20 percent of the world’s known nickel reserves, primarily in laterite-rich regions such as Sulawesi and Halmahera. Australia holds a similar share, but Indonesia’s logistical reality is unique. Nickel ore must be extracted in remote, forested regions and transported across islands before it ever reaches a port. This makes nickel not only a mineral resource but a governance challenge, determining how to balance extraction with environmental protection, community rights, and national economic strategy. The Ambassador’s description of these pressures made clear that Indonesia’s position in the global nickel market is shaped as much by geography and political will as by the ore itself.
How Nickel Gets Processed Once the Ore Leaves the Mine
Nickel ore, especially laterite ore from Indonesia, is not ready for batteries or stainless steel the moment it is dug out of the ground. The real transformation happens after it reaches a processing centre, usually a smelter or refinery.
Laterite ore is challenging. It contains only a small percentage of nickel bound tightly within iron-rich clays. To access usable nickel, the ore must go through energy-intensive, high-temperature processes. The most common pathway today is High-Pressure Acid Leaching (HPAL). Ore is crushed, mixed with sulfuric acid, and subjected to intense heat and pressure. The nickel and cobalt dissolve into a solution and can then be separated, purified, and converted into materials like mixed hydroxide precipitate (MHP) or nickel sulfate, which feed directly into battery manufacturing.
Another route, especially for lower-grade ore, is pyrometallurgy. Here the ore is dried and melted in massive furnaces to produce nickel pig iron (NPI). NPI is not used in batteries but is essential for stainless steel, which still accounts for the majority of global nickel demand. China’s large stainless-steel industry is what originally drove its investment in Indonesian nickel, long before EVs transformed the market.
Both refining pathways require enormous amounts of energy, water, and chemical inputs. And both create waste streams that must be carefully managed to avoid soil and ocean contamination: a central concern in Indonesia, where tailings disposal has become a point of public debate.
Once processed, nickel sulfate crosses borders and enters a different world entirely: battery factories, supply-chain audits, clean-energy targets, and the geopolitics of EV manufacturing.
It is the journey from muddy ore to high-purity chemical that determines who captures value — miners, refiners, manufacturers, or entire nations.
Why Indonesia Banned Raw Nickel Exports
In 2020, Indonesia made a bold strategic decision: it banned the export of raw nickel ore. The goal was simple:
Stop sending low-value ore abroad and instead attract investment in domestic refining, smelting, and manufacturing.
If the world needed nickel for its energy transition, Indonesia wanted more of the economic benefits to remain at home. The ban accelerated a massive wave of industrial development. Chinese firms, in particular, moved quickly, financing smelters and industrial parks that now anchor Indonesia’s rapidly growing metals sector. Western governments challenged the ban at the WTO, but Indonesia held its ground. The message was unmistakable: resource-rich nations can set their own terms.
How Nickel Moves Into the Clean-Energy System
Nickel’s role in batteries is often misunderstood. It increases energy density, allowing vehicles to travel farther on a single charge. High-nickel chemistries like NMC (Nickel-Manganese-Cobalt) and NCA (Nickel-Cobalt-Aluminum) dominate mid- and long-range EVs, where performance matters. Nickel is also essential for stainless steel production, aerospace superalloys, and catalytic processes across heavy industry.
Even with the rise of cobalt-free LFP (Lithium Iron Phosphate) batteries, global demand for nickel remains high because these lower-cost chemistries do not replace the need for high-performance batteries across all vehicle classes.
Who Processes Nickel
Despite large reserves in Indonesia and Australia, China dominates nickel processing. Its companies invested early in refining technologies, smelters, and integrated supply chains linking Indonesian mines to Chinese and Southeast Asian industrial hubs. This is why any discussion about nickel is ultimately a discussion about industrial policy and geopolitical strategy. Raw materials flow one way; high-value battery materials flow another. Indonesia’s export ban was, in many ways, a response to that imbalance. Canada, Europe, and the U.S. are now attempting to build domestic processing capacity, but doing so requires billions in investment, stable industrial policy, and partnerships with resource-rich nations that go far beyond procurement contracts.
A Just Transition Requires More Than Minerals
The Ambassador’s comments reminded me that the energy transition is not only about technology. It is about people whose forests become mines, whose coastlines receive industrial runoff, whose villages sit beside smelters, and whose local economies shift with global commodity prices. Countries like Indonesia must manage the tension between economic opportunity, environmental preservation, and community well-being, while navigating global pressure to supply materials that wealthier nations depend on for their climate targets.
A just transition cannot be defined only by cleaner technologies. It must also include the conditions under which those technologies are made.
Where This Leaves Canada
Canada wants to be a leader in clean energy, yet it remains structurally dependent on minerals it does not produce or process at scale. Nickel in Sudbury and Voisey’s Bay contributes to global supply, but Canadian refining capacity remains limited.
If Canada hopes to compete in the battery and EV ecosystem, it must build stronger partnerships with countries like Indonesia, not through extractive procurement, but through co-investment, technology transfer, and frameworks that support community benefit, environmental stewardship, and long-term shared value.
How the world responds, especially countries like Canada, will determine whether the clean-energy transition becomes more equitable than the fossil-fuel era, or simply repeats old patterns with new materials.