Madagascar’s mining minister says the proposed project was inspired by Morowali Industrial Park.
BEIJING – Chinese companies that helped build Indonesia’s nickel industry into the world’s largest producer are now looking as far afield as Africa for long-term alternatives.
The shift comes as mounting policy pressures test the investment model that has reshaped global supply chains.
As reported by Reuters, Tsingshan Group is considering the development of a major project in Madagascar, according to the country’s Ministry of Mining.
Meanwhile, Lygend Resources is exploring a project in Tanzania and is also considering reviving operations at the Koniambo nickel project in New Caledonia, according to industry sources.
Chinese companies have been the driving force behind the development of smelters and industrial parks that transformed Indonesia into the global growth centre of the nickel industry, a metal used in stainless steel and electric vehicle batteries, following the government’s ban on nickel ore exports in 2020.
Indonesia’s share of global mined nickel production rose to more than 60% in 2025 from around 30% in 2020, according to data from the US Geological Survey (USGS).
Low-cost production backed by Chinese investment created a surplus in the nickel market, depressing prices and forcing higher-cost producers such as Glencore, BHP and Sumitomo to close, suspend operations or seek buyers for their assets.
However, since taking office in late 2024, President Prabowo Subianto has focused on increasing state revenue and spending, including a USD 20 billion free meals programme.
At the end of May, Prabowo announced plans to place exports of coal, palm oil and ferroalloys under more centralised state control.
Although nickel pig iron was later confirmed to be excluded from the policy, the proposal nevertheless raised investor concerns over policy stability.
Even before the announcement, investors had already been unsettled by tighter nickel ore mining quotas, proposed tax increases and a sharp rise in Indonesia’s mineral benchmark prices.
The Chinese Chamber of Commerce in Indonesia also sent a letter to Prabowo warning that the measures could hinder future investment.
“This is clearly negative for the industry,” said Tim Hoff, senior mining analyst at Canaccord.
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