After the world's largest nickel producer Indonesia officially approved a tax on battery metal exports, international nickel prices surged sharply. On Wednesday, March 25, 2026, nickel futures on the London Metal Exchange (LME) rose as much as 2.7% and closed up 2.1% at $17,310 per ton. The Finance Minister confirmed that President Prabowo has approved export tariffs on coal and nickel, with specific rates still under in-depth discussion.
Indonesia introduced this policy primarily due to national fiscal pressure. As a net importer of crude oil and refined products, Indonesia has been severely impacted by the surge in international oil prices triggered by conflicts involving Iran, the United States, and Israel. Disrupted global energy supply not only threatens domestic economic growth but also pushes up inflation.
The government hopes to offset fiscal deficits by imposing export taxes on commodities, increasing national revenue during the crisis. This move is also a key part of Indonesia’s downstream processing strategy for the nickel industry chain. Indonesia holds more than half of global nickel production and has long sought to break away from low-value-added raw material export, attracting investment in metal processing to become a global center for battery and electric vehicle industries. The plan continues the downstream strategy of previous administrations and has been further strengthened under the Prabowo government.
In fact, discussions on nickel export taxes emerged as early as 2022. In early 2026, due to the disruption of Hormuz Strait shipping by the Middle East war leading to a sharp increase in Indonesia’s energy subsidy expenditures, the urgency of the policy significantly increased. Leveraging its dominant position with over 50% of global supply, Indonesia holds strong market pricing power. Analysts point out that Indonesia’s fiscal difficulties have strengthened market expectations for policy implementation. Higher export taxes will directly push up production costs and international nickel prices. This policy will not only increase fiscal revenue but also force global investors to build smelters within Indonesia, helping the country deeply participate in the global green energy transition and occupy a core position in the new energy industry chain.
After the world's largest nickel producer Indonesia officially approved a tax on battery metal exports, international nickel prices surged sharply. On Wednesday, March 25, 2026, nickel futures on the London Metal Exchange (LME) rose as much as 2.7% and closed up 2.1% at $17,310 per ton. The Finance Minister confirmed that President Prabowo has approved export tariffs on coal and nickel, with specific rates still under in-depth discussion.
Indonesia introduced this policy primarily due to national fiscal pressure. As a net importer of crude oil and refined products, Indonesia has been severely impacted by the surge in international oil prices triggered by conflicts involving Iran, the United States, and Israel. Disrupted global energy supply not only threatens domestic economic growth but also pushes up inflation.
The government hopes to offset fiscal deficits by imposing export taxes on commodities, increasing national revenue during the crisis. This move is also a key part of Indonesia’s downstream processing strategy for the nickel industry chain. Indonesia holds more than half of global nickel production and has long sought to break away from low-value-added raw material export, attracting investment in metal processing to become a global center for battery and electric vehicle industries. The plan continues the downstream strategy of previous administrations and has been further strengthened under the Prabowo government.
In fact, discussions on nickel export taxes emerged as early as 2022. In early 2026, due to the disruption of Hormuz Strait shipping by the Middle East war leading to a sharp increase in Indonesia’s energy subsidy expenditures, the urgency of the policy significantly increased. Leveraging its dominant position with over 50% of global supply, Indonesia holds strong market pricing power. Analysts point out that Indonesia’s fiscal difficulties have strengthened market expectations for policy implementation. Higher export taxes will directly push up production costs and international nickel prices. This policy will not only increase fiscal revenue but also force global investors to build smelters within Indonesia, helping the country deeply participate in the global green energy transition and occupy a core position in the new energy industry chain.