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Indonesia is the world's largest nickel producer. According to the International Nickel Study Group, it produced 1.75 million tonnes of nickel in 2025, or 46.9% of global primary output. Much of its battery-grade nickel is processed through High Pressure Acid Leaching (HPAL) into mixed hydroxide precipitate (MHP), with output of about 444,000 tonnes of contained nickel in 2025.
Behind every tonne of battery nickel sits a large volume of chemicals. According to the Indonesian Nickel Industry Forum (FINI), one tonne of nickel in MHP needs about 10–11 tonnes of sulfur, burned into sulfuric acid. These chemicals are the hidden backbone of Indonesia's energy transition.
Dependence on sulfur and sulfuric acid
Indonesia's sulfur imports rose from about 2.01 million tonnes in 2022 to 5.35 million tonnes in 2025, up 48% year on year. The country also imported 1.09 million tonnes of sulfuric acid in 2025. MHP production's share of sulfuric acid demand jumped from around half in 2022 to more than 80% in 2025.
That dependence carries risk. Around 74–84% of imported sulfur comes from Gulf countries. When tensions in the Strait of Hormuz escalated in March 2026, Indonesian MHP producers suspended long-term contract offers. FINI says sulfur now accounts for more than 55% of HPAL processing costs; if sulfur prices stay near US$800 per tonne, HPAL cash costs could rise by about US$1,600 per tonne of nickel.
Domestic sulfuric acid from copper smelters
Indonesia already has a source of sulfuric acid that does not depend on imported sulfur: its copper smelters. The acid is made from sulfur already contained in copper concentrate. Freeport's Manyar smelter in JIIPE is designed to produce about 1.5 million tonnes of sulfuric acid a year, and Amman Mineral's smelter in Sumbawa about 830,000 tonnes. Manyar's sulfuric acid is designated for the domestic market.
New acid capacity is also being built. PT Kolaka Nickel Indonesia in Southeast Sulawesi is preparing a 4×1 million tonne per year sulfuric acid plant for its HPAL complex.
The missing link: cathode materials
Indonesia's battery chain runs from nickel ore to MHP, nickel sulfate, precursor cathode active material (pCAM), cathode and battery cells. Nickel sulfate capacity exists, for example Halmahera Persada Lygend with more than 240,000 tonnes a year, and battery cells are already made in Karawang. But according to the Ministry of Investment and Downstreaming, pCAM and cathode remain the incomplete links.
Investment is starting to arrive. CNGR began operating a pCAM plant in South Kalimantan in January 2026, ramping up to 20,000 tonnes a year, and Australia's Pure Battery Technologies plans a US$350 million MHP-based pCAM plant. pCAM production itself needs process chemicals such as ammonia and alkali solutions.
Energy transition chemicals: the opportunity map
|
Chemical |
Used for |
Current supply situation |
JIIPE link |
|---|---|---|---|
|
Sulfuric acid |
HPAL leaching, phosphate fertilizer, battery metal sulfates |
5.35 Mt of sulfur and 1.09 Mt of acid imported in 2025 |
~1.5 Mt/year from the Manyar smelter |
|
Ammonia |
pCAM processing, fertilizer, nitric acid |
Demand grows with pCAM projects |
Phase 2 of the Golden Elephant complex (ammonia and urea) |
|
Nickel sulfate and pCAM |
NCM battery cathodes |
pCAM capacity only beginning |
Industrial land near Java's battery cell market |
|
Copper foil |
Battery anodes |
Produced by Hailiang |
Hailiang plant in JIIPE |
Why JIIPE
- A domestic sulfuric acid source inside the estate, made from copper concentrate sulfur rather than imported Gulf sulfur
- Ammonia planned inside the estate through Phase 2 of Golden Elephant's US$600 million project
- A deep-sea port for shipping bulk chemicals to nickel processing hubs in Sulawesi and Maluku
- On Java, close to the Karawang battery cell plants and Indonesia's largest market
- Gresik SEZ incentives, including a 10- to 20-year tax holiday depending on investment size
Indonesia's energy transition runs on chemicals. Talk to the JIIPE team about land, utilities and SEZ incentives for your acid, process chemical or battery material plant.