This chapter examines the structure and dynamics underpinning the global nickel supply chain. It identifies key challenges to responsible production and processing, as well as tracing nickel products along value chains. It then outlines the regulatory and operational environment, as well as associated risks, in Indonesia and the Philippines.
Enhancing Resilience Through Traceability
Insights from Lithium and Nickel Supply Chains in Latin America and Southeast Asia
Abstract
Nickel is a strategically important critical mineral for industrial production and emerging battery technologies, serving as a key input for stainless steel and electric vehicle batteries. Highly concentrated supply chains, combined with complex ownership structures and significant operational and governance risks in major producing countries, means that a handful of jurisdictions can significantly shape investment dynamics and the reliability of global battery supply chains. Addressing operational and governance risks while improving traceability should therefore be a priority for policymakers seeking to de-risk investment and support responsible sourcing in Indonesia and the Philippines, respectively the mineral’s first (65%) and second (10%) producers (Benchmark Mineral Intelligence, 2026[1]).
Nickel is primarily used to produce stainless steel and EV batteries. Stainless steel accounted for 64% of global consumption in 2024, batteries for 15%, and the remaining uses included non-ferrous alloys (9%), electroplating (5%) and other (7%) (Natural Resources Canada, 2026[2]). Batteries are the fastest-growing segment and are expected to play an increasingly influential role.
Global nickel demand has expanded steadily over the past two decades, increasing by approximately 112% between 2000 and 2020, with an average annual growth rate of 3.8% (INSG, 2024[3]). Since then, demand rose at around 5% annually, particularly due to China’s industrial expansion. Global demand for nickel is projected to rise by approximately 67 to 100% between 2023 and 2040, driven largely by the expansion of clean energy technologies (CRI, 2025[4]). In 2024, Asia accounted for 86% of global nickel demand, with China alone representing over 60% (INSG, 2024[3]). The share of secondary supply (including direct use scrap) in total demand reached 26% in 2023, decreasing from 33% in 2015 despite rising material consumption (IEA, 2024[5]). Although nickel demand is projected to rise over the medium to long term, the market has experienced significant volatility in recent years.
Nickel can be found in various forms, namely laterite ore and sulphide ore, which require specific processing techniques. Laterite ore is primarily found in Australia, Indonesia, New Caledonia and the Philippines whereas sulphide ore is found in Australia, Canada, China and Russia.
Nickel requires specific processing techniques depending on its form. Sulphide ores are typically concentrated, smelted to a matte and then refined to produce metal or high-quality nickel sulphate used for batteries. Laterite ores come in two forms: saprolite and limonite. The former are typically processed through pyrometallurgy in Rotary Kiln Electric Furnace (RKEF) smelters to ferronickel or nickel pig iron and used for stainless steel production, while the latter is often processed through high-pressure acid leaching (HPAL) into mixed hydroxide precipitate (MHP) that can ultimately be refined into battery-grade nickel sulphate. Production of nickel sulphate or other nickel salts has been identified in twelve countries (Fan et al., 2024[6]; Benchmark Mineral Intelligence, 2026[1]).
Primary nickel supply chains are concentrated in terms of origin. In 2025, Indonesia accounted for nearly 65% of total nickel production, followed by the Philippines (10%) and Russia (5%), consistent with previous years’ trend (USGS, 2025[7]). Processing is also concentrated in Indonesia (43%), with the majority of smelting focused on nickel pig iron and ferronickel, and increasingly MHP and nickel matte, followed by China (31%) and Japan (3%) (IEA, 2025[8]). Though Indonesia is expanding operations in this respect, lower-grade intermediates are often shipped to China, where nearly 75% of battery-sulphate production is located (IEA-OECD, 2025[9]; Andrenelli et al., 2025[10]).
Despite this geographical concentration, the company-level concentration of nickel production and refining is relatively low. Small companies account for roughly 75% of mining and refining compared to around 16% by the top three companies for both production and refining (IEA-OECD, 2025[9]). While this dispersion of ownership suggests that control of productive assets remains fragmented across a number of smaller actors, the ownership structures indicate a more complex story: though Indonesia accounts for the majority of global production and processing, domestic companies control less than 10% of production, compared with roughly 40% controlled by companies with Chinese majority ownership (IEA, 2024[11]).
Note: HPAL = high-pressure acid leaching; FeNi = ferronickel; NPI = nickel pig iron; MHP = mixed hydroxide precipitate; MSP = mixed sulphide precipitate.
Source: (IEA-OECD, 2025[9]), CC by 4.0.
Secondary nickel including direct use of scrap currently supplies 26% of global demand (2023), leaving a shortfall as nickel consumption continues to surge, especially in developing economies where end-of-life stock is insufficient (IEA, 2024[12]). Most nickel is downcycled to stainless steel, and this is also the dominant source of recycled nickel. Stainless steel is highly recyclable and effectively recycled at exceptionally high rates (over 90% in the EU for example) (European Circular Economy Stakeholder Platform, 2020[13]; worldstainless, 2025[14]). Recycling input rates, i.e. the share of recycled nickel used as secondary material, vary widely across regions: some economies show very high rates (e.g., 85% in Europe, 83% in the United States, 72% in Japan), while others, mainly where stainless steel markets are more recent, exhibit lower rates as much of the material has not yet reached end‑of‑life (e.g., 31% in China, 56% in India) (worldstainless, 2025[14]). Some other countries, such as Indonesia and Thailand, despite their expanding steel stocks, remain major importers of steel scrap and therefore record high recycling input rates (Watari et al., 2025[15]). Globally, 50% of stainless steel supply is sourced through recycling steel, which reflects its high recyclability potential, but also its longevity and shortage of end-of-life steel stock in emerging economies (Lu et al., 2022[16]; British Stainless Steel Association, 2026[17]). However, the increasing nickel‑rich EV batteries sales, accounting for 54% of global EV batteries sales in 2024 (IEA, 2025[18]), will substantially increase and diversify the pool of nickel available for recycling.
Indonesia’s rise as the world’s leading nickel producer, with production expanding by around 700% between 2012 and 2022, is tied to its strategic policy shift from exporting unprocessed ore to promoting domestic value addition (IEA, 2025[8]). Beginning with export restrictions on raw ore in the early 2010s and reinforced through subsequent investment regulations, Indonesia has incentivised the establishment of smelters and processing facilities that produce high-value products like ferronickel, nickel matte and battery precursors. By contrast, the Philippines has followed a more uneven trajectory. While it remains the second-largest nickel producer worldwide, nickel production in the Philippines has faced considerable environmental compliance challenges and moratoria on mining activity. Recent policy efforts have sought to rehabilitate the mining sector and attract investment while positioning the country as an alternative source of nickel for markets seeking to diversify away from Chinese-controlled supply chains. This has not come without challenges; in 2024, production in Australia and the Philippines declined by roughly 26% and 20%, largely due to company-level decisions to reduce or stop nickel production due to challenging market conditions and declining prices (USGS, 2025[7]).
4.3.1. Environment risks from mining and processing
Nickel extraction and processing have been associated with considerable environmental, operational and governance risks. In Indonesia and the Philippines, mining competes for land with forestry, biodiversity and other human activities. Moreover, mining processes produce substantial amounts of waste, often containing toxic water and low-grade materials which contaminate soil and can leak to other parts of the ecosystem when mismanaged (Bravante and Holden, 2009[19]; Balbin et al., 2023[20]). Mining is associated with deforestation, water and soil pollution, high carbon emissions from coal-powered processing, and tailings-related damage to rivers and other ecosystems (IUCN, 2022[21]; CRI, 2025[22]; OCCRP, 2025[23]). In Indonesia, the smelting and refining of nickel is typically coal-powered and responsible for a large share of GHG emissions, as well as for the production of waste slags (about 150 million tonnes of slag per year) and leaching residues (Wei et al., 2020[24]; Bartzas, Tsakiridis and Komnitsas, 2021[25]). When nickel slags are improperly classified, improperly disposed of in surface dumps, dumped at sea, or accumulated in surface heaps, they present serious environmental hazards due to their content of toxic and heavy metal(loid)s with a high potential for leakage (Bartzas, Tsakiridis and Komnitsas, 2021[25]). More details on environmental hazards specific to Indonesia and the Philippines can be found in the dedicated sections below.
4.3.2. Social impacts and community engagement
Social harms affect local communities and Indigenous peoples through illegal land acquisitions, health risks, livelihood loss, inadequate compensation and attacks on environmental activists (CRI, 2025[4]; Amnesty International, 2025[26]). A shared concern across both Indonesia and the Philippines is the inadequate engagement of local affected communities. Concerns have also been raised concerning the failure to obtain Free, Prior and Informed Consent (FPIC) from affected Indigenous Peoples before projects proceed. Residents near the Weda Bay Industrial Park report that companies have violated FPIC requirements during land acquisition (CRI, 2025[4]). In the Philippines, Indigenous and rural communities have not received adequate information on the environmental risks of certain projects in the absence of legally-required consultations (Amnesty International, 2025[26]; CRI, 2025[22]). Projects have contributed to the destruction of livelihoods in both countries, among other documented consequences. For example, areas near Indonesian smelting complexes report a more than twentyfold increase in the incidence of respiratory infections between 2020 and 2023, while rivers polluted by smelting byproducts have become unsafe for drinking (CRI, 2025[4]). Similarly, communities in the Philippine Caraga region report that fishing and farming were strongly affected by pollution and siltation associated with mining and smelting activity (Amnesty International, 2025[26]). Occupational health and safety risks remain a major concern across the nickel value chain in both Indonesia and the Philippines, particularly in mining, smelting, and processing operations. Workers face exposure to hazardous conditions, including heavy machinery accidents, explosions, fires, landslides, dust, and chemical pollutants (CRI, 2025[22]; Pacific Asia Resource Center, n.d.[27]; Tempo, 2025[28]).
4.3.3. Governance challenges
Governance challenges persist along nickel supply chains. These include conflicts of interest, the involvement of politically exposed persons (PEPs) in commercial concerns, illegal mining and weak law enforcement, although some permits have been revoked to protect sensitive ecosystems (Syarif, 2025[29]; Vander Velde, 2025[30]). In both countries, close ties between political and commercial interests in the mining and processing sectors have complicated regulatory oversight. More broadly, the rapid pace of industrial expansion has, in some cases, appeared to outpace the capacity of regulatory frameworks to enforce existing operational requirements.
Nickel production and processing are also associated with significant fiscal governance challenges. The complexity of nickel value chains creates substantial BEPS risks. As with lithium, the mispricing of transactions between related parties, manipulation of treatment and refining charges and the use of intra-group financing arrangements can erode fiscal revenues in producing countries.
4.3.4. Manufacturing and recycling risks
Besides mining, the manufacturing of nickel applications – such as stainless steel and batteries – also causes environmental risks. Battery cell, module and pack manufacturing, for example, accounts for 22% of total cradle-to-gate CO2 emissions, primarily from energy-intensive steps like electrode drying, formation cycling, and dry room operations (Kim, Lee and Wallington, 2023[31]; Knehr et al., 2024[32]). The energy intensity and related emissions of nickel-rich applications manufacturing is determined by the manufacturing technologies used, but also by the composition of the regional energy mix (Johnson et al., 2008[33]; International Stainless Steel Forum, 2021[34]). Utilising recycled materials in place of virgin materials substantially reduces both energy consumption and carbon dioxide emissions. For example, stainless steel produced only with recycled content emits less than a third of the CO2 compared to production using solely virgin materials (Johnson et al., 2008[33]; Worldstainless, 2025[35]). However, while the recycling of stainless steel is well developed, it remains very limited for batteries. Moreover, similar to lithium-ion battery recycling, nickel recycling from batteries may cause environmental and social hazards when improperly managed through informal networks (World Health Organization, 2024[36]).
4.3.5. Nickel pricing
As observed in the preceding chapter on lithium, mispricing of mineral transactions remains a key challenge for producing countries, given the central role of mineral pricing in determining revenues from corporate income tax, royalties and withholding taxes. Where minerals are sold to related parties at below market value and subsequently on-sold at market prices, profits may be shifted out of the producing jurisdiction, eroding the domestic tax base. Safeguarding fiscal revenues therefore depends on the accurate determination of the price at which minerals are sold.
Applying the general pricing framework, nickel pricing varies depending on product form, grade and processing stage, as well as the level of market transparency. Nickel products range from ore and semi-processed materials such as matte and ferronickel to refined metal. In contrast to lithium, certain refined nickel products are more closely linked to exchange-based pricing, particularly through reference prices such as those published by the London Metal Exchange (LME). However, significant adjustments are required for semi-processed products. Product quality and composition are key determinants of price, with variations in grade and the presence of impurities resulting in penalties or discounts. Treatment and refining charges (TC/RCs) further reflect the costs associated with downstream processing. As a result, the valuation of nickel products depends both on the intrinsic characteristics of the material and the extent of further processing required.
Indonesia’s Ministerial Decree No. 144.K/MB.01/MEM.B/2026 overhauled the country’s mineral benchmark pricing methodology. The reform replaced the previous nickel-grade-based pricing approach with a multi-component formula that values not only nickel content but also associated minerals (e.g. iron, cobalt, and chromium) subject to specific thresholds, alongside moisture content. By recognising the economic value of by-products that were previously excluded from the benchmark price, the reform increased the benchmark value of many nickel ores, particularly limonite ores, which benefit from the inclusion of cobalt in the pricing formula (Indonesia Ministry of Mines and Energy Resources, 2026[37]).
Logistics costs, including freight and insurance, as well as contractual terms related to delivery and ownership transfer, also influence pricing outcomes. In vertically integrated multinational structures, these elements may be manipulated through related-party arrangements, particularly where semi-processed and intermediate products are traded between affiliated entities prior to final sale. BEPS risks in the nickel value chain therefore arise from the mispricing of semi-processed and intermediate products, inappropriate application of TC/RCs, and the structuring of transactions that shift profits across jurisdictions.
Beyond pricing, nickel value chains are also exposed to BEPS risks arising from financing arrangements and other related-party transactions. As outlined in Annex 3.A., the use of intra-group debt with unrealistic terms may result in excessive interest deductions, particularly in capital-intensive processing and refining stages. In addition, mispricing of logistics and intra-group service arrangements may further erode the tax base in producing countries.
Addressing these risks requires both accurate pricing and the effective application of domestic legal frameworks. This includes transfer pricing rules, interest limitation provisions and documentation requirements, to ensure that profits are taxed where economic activities take place.
In this context, traceability systems play a critical supporting role by providing verifiable data on product characteristics, physical flows and transaction conditions, thereby strengthening the application of the arm’s length principle. The following sections examine how these risks manifest in Indonesia and the Philippines, the largest nickel-producing countries and the focus of this report’s site visits and stakeholder consultations.
4.4.1. Indonesia: nickel production and processing
Indonesia has achieved a dominant role as the top global nickel producer, with output having increased by 16 times since 2015 (IEA, 2025[8]). Notably, Indonesia has leveraged export restrictions on unprocessed nickel in an effort to spur the development of domestic downstream industries (Andrenelli et al., 2025[10]). Beginning with export restrictions on raw ore in the early 2010s and reinforced through subsequent investment regulations, Indonesia has incentivised the establishment of smelters and processing facilities that produce nickel pig iron, ferronickel, nickel matte and battery precursors. The development of downstream economic activity, particularly related to the stainless steel industry, was driven to a large extent by Chinese state-supported investments. Differences in risk appetite, industrial strategy, and experience deploying these technologies at scale – in addition to capital intensity – may explain the prevalence of investment by non-OECD countries (Andrenelli et al., 2025[10]). Some estimates indicate Chinese companies accounted for 90% of the construction of Indonesia’s domestic refining capacity, leading to varying degrees of the corresponding value addition to accrue domestically (across joint ventures, local equity participation, employment, procurement linkages and fiscal revenues), as well as mixed outcomes in terms of operational and governance performance (CSIS, 2024[38]).
Indonesia has adopted a centralised mineral production, processing and export model. The government owns mineral rights and grants mining business permits (IUP) or special mining business permits (IUPK). In 2026, 422 IUPs are active in nickel (Indonesian Nickel Mining Association, 2026[39]). Mining output is regulated by the state, which sets production quotas, and subjected to export restrictions on unprocessed nickel. Targets for 2026 are set to roughly 270 million tonnes. The current processing infrastructure encompasses 79 major facilities, dominated by 55 RKEF smelters producing nickel pig iron and ferronickel, 10 HPAL smelters, 8 nickel matte plants, and 6 integrated stainless steel plants, with precursor and cathode lines planned as part of the government’s value addition strategy (Indonesian Nickel Mining Association, 2026[39]). In addition to domestic production, Indonesia imports roughly one‑third of the Philippines’ nickel ore output, primarily to optimise feedstock chemistry by blending the Philippines’ higher‑silicon ores with Indonesia’s more magnesium‑rich ores.
In 2026, Indonesia also introduced a centralised “single‑gate” export system under the SOE Danantara for ferroalloys such as ferronickel and nickel pig iron. During a transition phase starting in 2026, nickel producers must initially report export activities to Danantara, before moving toward a system in which Danantara may act as the sole export intermediary by 2027 – purchasing products from domestic producers and selling them to global markets.
Foreign companies cannot bid directly for mining permits, but can enter into joint ventures with, or purchase stakes in, Indonesian companies that can submit bids for permits (Mining Transparency, 2025[40]). Foreign investors operating in Indonesia are further subject to mandatory share divestment and local ownership over time as well as incentives to invest in domestic processing capacity (Reuters, 2025[41]). The regulatory environment for the Indonesian extractives sector provides a key role to SOEs such as the state holding company PT Mineral Industri Indonesia (MIND ID), which controls significant upstream reserves through subsidiaries such as PT Antam while also participating in joint ventures with foreign partners. As highlighted in Table 4.1, this has led to a proliferation of joint ventures, often with fairly complex ownership structures.
4.4.2. Indonesia: Regulatory environment
Indonesia has taken notable policy measures to improve environmental and governance performance in its nickel industry. In order to ensure environmental protection, mining stakeholders are subject to several regulations, such as environmental approval mechanism (Analisis Mengenai Dampak Lingkungan/AMDAL), utilisation of forest area approval mechanism (Persetujuan Penggunaan Kawasan Hutan/PPKH) – restraining use to 10% of total local forest area, and mine reclamation funds submission (Jaminan Reklamasi) and a mandatory payment to collect collateral funds from companies (Nickel Institute, 2024[42]). Indonesia’s rating system for environmental compliance (PROPER), which applies to companies meeting certain eligibility criteria established by the government, has prompted action to improve overall performance ratings (OECD, 2026[43]; Indonesian Ministry of Environment, n.d.[44]). Additionally, the National Mid-Term Development Plan (2020-2024) promoted a responsible approach to nickel processing and other downstream activities, while the National Energy Policy identifies approaches to reduce the carbon impact of nickel production and processing (IISD, 2025[45]). Indonesia’s Corruption Eradication Commission is highly experienced in leading investigations related to the mineral sector. For example, it exposed corruption in legal and illegal nickel mining extraction in North Maluku and Sulawesi, including bribery, permit manipulation, and land grabbing (UNICRI, 2025[46]). In 2023, the Commission revealed that about 5.3 million tonnes of nickel ore from Indonesia were sent illegally to China from January 2020 to June 2022 (The Straits Time, 2023[47]).
In addition to establishing the SIMBARA traceability system (see Box 4.3), Indonesia has implemented BEPS Actions 4 (Limitation on Interest Deductions), 8-10 (Aligning Transfer Pricing Outcomes With Value Creation) and 13 (Transfer Pricing Documentation) through a comprehensive transfer pricing reform to modernise their income tax law (OECD, 2025[48]). Indonesia has implemented BEPS Action 13 (Transfer Pricing Documentation) requiring multi-national enterprises to prepare standardised transfer pricing documentation which should assist the tax administration to identify and address transfer pricing risks more effectively (See Annex 2.A.).
Tax incentives may be effective in encouraging investment in certain cases but come with risks and costs. Indonesia has utilised tax incentives, particularly, “tax holidays” as part of its broader industrial strategy aimed at strengthening strategically important sectors and promoting long-term economic development (UNCTAD, 2018[49]). Indonesia’s policy objective of moving up the value chain, from raw mineral extraction to domestic refining and battery-grade production, has been promoted by a policy-mix including tax incentives and complementary measures, including restrictions on raw ore exports and incentives for domestic processing. Under the regime, eligible companies may receive substantial corporate income tax reductions, including “tax holidays” which consists of exemptions of up to 100 per cent for defined periods, depending on the scale of investment and sectoral classification. Policies restricting raw nickel ore exports and incentivising domestic processing coincided with an increase of foreign investment realisation of 47% in 2022 for sectors related to downstreaming (IMF, 2023[50]). China and Hong Kong accounted for nearly half of this change, marking a notable increase in Chinese capital participation in Indonesia’s nickel processing sector (IMF, 2023[50]).
The use of tax incentives raises important policy considerations regarding the interplay between attracting investment and collecting tax revenues. Income-based incentives, such as tax holidays, are less likely to promote additional investment and risk providing windfall gains to businesses that would have invested anyways. Expenditure-based incentives (e.g. accelerated depreciation, enhanced deductions) are typically more effective in increasing additional investment and provide more value for forgone revenue. Tax incentive design should limit such unnecessary costs and distortions and their impact needs be evaluated thoroughly and lead, where necessary, to reform (IMF-OECD-WB-UN, 2025[51]; OECD, forthcoming 2026[52]).
Indonesia’s income-based tax incentive was originally introduced in 2018 and amended in 2024 (Ministry of Finance, 2024[53]). The regime targets and provides corporate income tax reductions or exemptions for large-scale qualifying investments, including nickel mining and downstream processing sectors. The regime was extended until 31 December 2025.
Indonesia’s tax incentive regime is primarily income-based and therefore more exposed to the implementation of the GMT rules as they may reduce effective tax rates below 15% for in-scope mining companies, potentially triggering top-up taxes. In contrast, incentives, more strongly linked to substantive investment, such as tangible assets and employment, are less likely to be affected.
In light of these developments, Indonesia should consider reassessing the design of its income-based tax incentives to ensure that it continues to support industrial policy objectives while safeguarding revenue in a post-GMT environment.
© Luca Maiotti (OECD), all rights reserved
4.4.3. Indonesia: Operational and governance risks
Despite establishing policy measures to mitigate negative externalities associated with mining and processing, as well as strong state involvement in the mining sector more generally, considerable operational, environmental and governance challenges persist (Suprapto, 2023[54]; Kurniawan, Murayama and Nishikizawa, 2020[55]). Indonesian mining and smelting operations rely heavily on captive coal plants that supply energy to industrial facilities, exacerbating significant carbon emissions and pollution (CRI, 2025[4]; Barends, 2025[56]). In 2023, Indonesian nickel companies produced 29 to 70 tons of CO2 per tonne of nickel, and around 60 tonnes of CO2 per tonne of nickel on average (IISD, 2025[45]; IEA, 2025[8]). While the nickel production industry in Indonesia is subject to environmental regulation, the sector has become one of the leading drivers of deforestation, with forest loss more than doubling when processing plants become operational (Milko, Davey and Fassett, 2024[57]). Furthermore, tailings management presents acute risks. Recent dam failures, including one at Indonesia’s Morowali processing park, released toxic waste into waterways (OCCRP, 2025[23]) (Moore, 2025[58]). Deep-sea tailings disposal adds further risk to fragile marine ecosystems, including coral reefs. Residents near mining and processing facilities in Indonesia report severe air and water pollution, health issues, destruction of fishing and farming livelihoods, a lack of accessible environmental information, and risk to intimidation or criminal charges (CRI, 2025[4]). Though Indonesia has ratified all eight Fundamental Conventions of the International Labour Organization (ILO), labour rights are enforced inconsistently, particularly in sectors dominated by SOEs (OECD, 2026[43]). A long-awaited Indigenous Peoples Law has been under discussion for over a decade, but has yet to be passed (Context, 2024[59]).
The sector is further exposed to conflicts of interest and governance challenges. Stakeholder consultations indicated that national and local Politically Exposed Persons (PEPs), members of the police and the military, hold beneficial ownership in mining and smelting operations or affiliated service providers. The legal presence of military actors in the sector, as well as PEPs, is viewed by many as undermining effective law enforcement (Syarif, 2025[29]) (Hermawan, 2023[60]) (Tempo, 2022[61]). Illegal operations often feature subcontractors to conduct mining activities, which limit accountability and visibility over ultimate beneficial ownership, and allegedly feed into smelters’ supply chain to be legalised (Tempo, 2023[62]; Hermawan, 2023[60]). After conservation groups cited irregularities in permitting and raised alarm over threats to marine ecosystems, the Indonesian government announced it would revoke mining permits for four companies operating in the Raja Ampat archipelago – one of the world’s richest marine‑biodiversity regions (Velde, 2025[63]). Furthermore, the vast majority of Indonesia’s current nickel refining capacity is owned by Chinese companies or shareholders, with identification of ultimate ownership complicated by widespread use of corporate entities registered in different countries (C4ADS, 2025[64]; IEA, 2025[8]).
Tensions may arise between industrial parks and local communities, especially as the extractive sector severely impacts local farming and fishing activities. Although these facilities may generate significant employment for Indonesians, local economic development opportunities are somewhat limited. Many local residents are excluded from employment due to education thresholds, and local procurement of food and services is not possible due to high capital requirements for prospective suppliers by smelters. Local economic activities such as food stands and housing have nonetheless emerged in and around the industrial parks. There were also complaints about cultural and social impacts linked to illegal economic activities (e.g. prostitution and drug use), which were allegedly absent before industrial parks. Companies report investing in local community services, such as waste collection and recycling.
Protests against mining operations have been met with crackdowns by security forces and strategic lawsuits targeting protest leaders. These actions are facilitated by harsher penalties introduced under the 2020 revision of the Mining and Coal Law. In at least one case, a representative from an NGO contributing to IRMA activities was arrested by the North Maluku regional police, and his house was raided.
A legal framework for freedom of association exists in the country. The law generally allows workers to form and join independent unions and engage in collective bargaining, and prohibits anti-union discrimination. However, it is not always adequately respected, with allegations of favouritism to certain trade unions over others. According to sources in trade unions, payments have been offered to avoid demonstrations on May 1 in at least one industrial park.
Worker safety is a serious concern. On December 24, 2023, a smelter explosion claimed 21 lives, highlighting ongoing risks. An estimated 104 workplace accidents took place at nickel smelters between 2019 and 2025, leading to 107 deaths (IISD, 2025[45]), with the real number being likely much higher due to alleged underreporting. Lack of investment in safety equipment and infrastructure, as well as low baseline salaries leading to demands of overtime and ensuing fatigue, are indicated as the main causes for these incidents. There have been questions over the fairness and transparency of hiring practices of Chinese workers, who face movement restrictions outside the industrial park perimeters and depend on the company for entering and leaving the country. Some companies report allowing the use of industrial parks’ airports to facilitate repatriation of foreign workers for rest and recuperation periods.
The involvement of publicly listed Indonesian companies in smelter joint ventures makes it more likely such ventures will conduct better stakeholder engagement, according to some informants. Other NGOs report that the designation of certain mines as National Strategic Projects hampers transparency and accountability, as does the involvement of state-owned enterprises (SOEs).
Source: (TitaStory.id, 2026[65])
Complex ownership structures in the nickel sector may hinder responsible business conduct as well as supply chain traceability. The proliferation of joint ventures throughout the Indonesian nickel value chain reflects the central role of foreign investment in driving Indonesia’s rapid development of domestic processing capacity. Chinese companies and investors have played a particularly prominent role in this process and are estimated to control around 75% of nickel smelting capacity in Central Sulawesi, Southeast Sulawesi and North Maluku (Transparency International, 2025[66]). While joint ventures and other partnerships have facilitated investment, technology transfer and other benefits, they have also created governance challenges in cases where partners may have differing tolerance to operational and governance risks, as well as disclosure and due diligence requirements. In such settings, effective oversight of environmental, labour and community impacts, as well as overall transparency, depends on the willingness of all partners, or at least the majority owner, to align with domestic regulations and international operational and governance standards. Should this alignment be absent, minority shareholders and downstream buyers may struggle to exercise leverage and meet due-diligence expectations.
Minority shareholders have highlighted that their lack of full decision-making power complicates environmental and regulatory compliance, noting that partner-managed processes do not ensure data transparency. This is exemplified by the PT Weda Bay Nickel mine and smelting facilities, which is Indonesia’s largest nickel operation and produced over 516 000 tonnes of nickel in 2023, nearly more than Russia’s entire nickel output (Discovery Alert, 2025[67]). Located within the Weda Bay Industrial Park, the project spans over 45 000 hectares and is a joint venture operated by PT Weda Bay Nickel and owned by Chinese, French and Indonesian companies (see Table 4). The project has been criticised for causing pollution, deforestation, as well as outsize impacts on local Indigenous peoples (including displacement without Free Prior Informed Consent) and neighbouring communities. In September 2025, the government of Indonesia seized over 148 hectares of land around the project that had been cleared without appropriate permitting, followed by an announcement in December 2025 that miners would face fines for every hectare cleared in breach of permit (Bloomberg, 2025[68]). Failure to adequately mitigate negative externalities has also impacted investment. Norway’s sovereign wealth fund divested from Eramet in 2025 following a recommendation by its Council on Ethics due to Eramet’s role in PT Weda Bay Nickel, citing the risk of “severe environmental damage and serious violation of the human rights of uncontacted Indigenous people” (Government Pension Fund Global, 2025[69]). Other initiatives have targeted multilateral financing for the project, including advocacy urging the World Bank to refuse to issue political risk insurance to the project (MIGA, 2010[70]).
4.5.1. The Philippines: nickel production and processing
While the Philippines remains the second-largest unprocessed nickel producer worldwide (roughly 45 million metric tonnes of nickel in 2024 (CRI, 2025[22])), nickel production in the Philippines has faced considerable environmental compliance challenges and moratoria on mining activity. Recent policy efforts have sought to rehabilitate the mining sector and attract investment while positioning the country as an alternative source of nickel for markets seeking to diversify away from Chinese-controlled supply chains (UNICRI, 2024[71]). This has not come without challenges; in 2024, production in Australia and the Philippines declined by roughly 26% and 20%, largely due to company-level decisions to reduce or stop nickel production due to challenging market conditions and declining prices, but production in the Philippines has shown some modest recovery in 2025/2026 (USGS, 2025[7]; Benchmark Mineral Intelligence, 2026[1]).
Under the Philippine constitution, the government of the Philippines owns all natural resources, including minerals. Mining in the Philippines operates within a hybrid governance model in which the central government holds primary regulatory and decision-making authority while regional and local entities play supportive but consequential roles. Key legislation includes the Philippine Mining Act of 1995, the Environmental Impact Statement (EIS) System, Indigenous Peoples’ Rights Act (IPRA), and the Small-Scale Mining Act alongside sector-specific regulations (Asia Business Law Journal, 2025[72]). Under the 1995 Mining Act, the Department of Environment and Natural Resources (DENR) oversees permitting, licensing and regulation of large scale mining. Similarly, national agencies such as the Environmental Management Bureau (EMB) and National Commission on Indigenous Peoples (NCIP) enforce environmental and Indigenous consent requirements across the Philippines. While regional offices of the DENR collect and process initial applications and conduct inspections, they do not exercise final decision-making power. However, local governments are authorised to issue business permits, environmental approvals and decisions related to “social acceptability” and have established ordinances restricting mining.
Ownership rules require most mining companies to be at least 60% locally-owned, though foreign companies can hold up to 40% of ownership. Foreign-owned companies are permitted full ownership of mining and smelting operations in cases where they enter into Financial or Technical Assistance Agreements (FTAA) with the government and invest a minimum of USD 50 million (Government of the Philippines, 2026[73]).
Mineral production in the Philippines is dominated by privately owned enterprises that have entered production-sharing agreements with the government. These include a number of publicly listed holding companies and family-controlled entities such as the Nickel Asia Corporation, Sumitomo Metal Mining, and Platinum Group Metals Corporation. There are two processing plants in the Philippines, which are both operated by Nickel Asia Corporation in partnership with Sumitomo Metal Mining. Overall, ownership is characterised by concentrated family ownership, partnerships with foreign investors (primarily from China) and complex intermediary ownership of processing and trading companies (Empower, 2025[74]). Research indicates that a small number of individuals hold significant ownership stakes in major nickel producing and processing companies across the Philippines (Empower, 2025[74]).
Though private companies remain dominant, SOEs play notable roles across specific segments of the value chain, particularly in cases with limited private investment or elevated risks of negative externalities. In the Philippines, SOEs such as the Philippine National Oil Company-Exploration Corporation (PNOC-EC) and the Philippine Mining Development Corporation (PMDC), participate in the market through direct operations and joint ventures (PH-EITI, 2025[75]).
4.5.2. The Philippines: Regulatory environment
Following the 2017 closure of non-compliant mines, the Philippines has enforced stronger mechanisms for revenue-sharing and environmental protection. For example, the Mine Rehabilitation Fund was initiated in 2018 to audit mine rehabilitation, while the Enhanced Compliance Rating System ranks operators, with only top performing mines eligible for further expansion. Despite these measures, some regional governments have sought to prohibit new mining activity due to negative environmental and social impacts. For example, Palawan imposed a fifty-year provincial moratorium on mining in 2025.
Starting with the 1995 Mining Act, the Philippines has developed a relatively comprehensive regulatory framework for environmental management in mining, though implementation and enforcement remain inconsistent in practice (IEA, 2022[76]). To guarantee that environmental safeguards are incorporated, an Environmental Impact Assessment must be carried out and receive an Environmental Compliance Certificate from the government prior to the development of any mining project (Environmental Management Bureau, 2026[77]). In 2022, the Department of Environment and Natural Resources issued an order requiring companies to assess their current and future biodiversity impacts, conduct baseline studies, and prepare rehabilitation plans. Because some impacts may emerge after operations have ended, companies must also continue monitoring them for up to ten years following mine closure (Pascual, Domingo and Manejar, 2022[78]). However, environmental regulations are not correctly enforced by the Philippine government, leading to negative social and environmental impacts and large pollution levels (UNICRI, 2024[71]).
The Philippines have introduced a Strategic Investment Priority Plan (SIPP), which provides income-based tax incentives, as part of a broader strategy to strengthen strategically important sectors. For the mining sector, these incentives are directed at value-adding activities along the mining value chain such as mineral processing, refining and smelting. Given the scale of mining projects, particularly mineral processing, an alternative approach could be to consider an accelerated depreciation regime, which materially improves early cash flow and reduces taxable income in initial years, during the investment payback period. Accelerated depreciation or immediate expensing limits revenue foregone compared to other tax incentives and increases the likelihood of generating additional investment. It can be particularly beneficial for longer-lived assets, projects with high-upfront costs and liquidity-constrained firms.
Similar to the issues identified for Indonesia, concerns regarding the limited effectiveness, risk of windfall gains, economic distortions, limited value for money of income-based tax incentives are equally relevant for the Philippines, particularly, in light of the implementation of the GMT. On the other hand, expenditure-based incentives (e.g. accelerated depreciation, enhanced deductions) are typically more effective in increasing additional investment, provide more value for forgone revenue and are treated more favourably under the GMT.
In September 2025, the Philippines enacted the Enhanced Fiscal Regime for Large-Scale Metallic Mining Act, to modernise and unify the tax and fiscal framework applying to large-scale metallic mining operations nationwide. This legislation amends the National Internal Revenue Code and consolidates fiscal obligations for mining companies, both within and outside mineral reservations, with the goal of balancing investment attraction, revenue collection and transparency (IEA, 2024[79]). It also introduced additional measures to protect the mining tax base such as the introduction of a ring-fencing regime, which requires each mining project to be treated as a separate taxable unit for revenue and tax purposes, thereby preventing companies from artificially shifting income/expenses between projects and offsetting losses from one project against profits from another (OECD; IISD, 2025[80]). Nevertheless, translating the revised mining fiscal framework into local growth has proven difficult, as confirmed by interviews with local stakeholders. Despite being the second largest nickel producer, the nation’s mining industry contributes less than 1% to GDP, with large-scale mining provinces hosting the highest poverty incidences (Bantay Kita, 2024[81]).
The regime further enhances the audit and monitoring powers of the Bureau of Internal Revenue (BIR) and strengthens transparency and reporting requirements, including mandatory disclosures, closer co-ordination with environmental and geoscience authorities and through the establishment of the Transparency Office for Extractives (TOE) (IEA, 2024[79]). These measures will enhance BIR’s and other government agencies' ability in accurately determining the value and movement of the nickel across the value chain. The Philippines has implemented key OECD BEPS measures that are particularly relevant to mitigating mining-related BEPS risks, such as thin capitalisation rules, Actions 8-10 (Aligning Transfer Pricing Outcomes with Value Creation) and Action 13 (Transfer Pricing Documentation).
4.5.3. The Philippines: Operational and governance risks
The environmental and social impacts of mining sites in the Philippines are well documented. The development of mining sites can result in reduced land availability for local biodiversity and forestry resources (Pascual, Domingo and Manejar, 2022[78]). Moreover, once material extraction is complete, large areas of land become unproductive and covered with mine waste. Indeed, nickel mining discards subsequent amounts of low-grade material waste onsite, often containing toxic water (Bravante and Holden, 2009[19]). If nickel laterite mine waste is not properly managed, it can quickly erode during rainfall and pollute nearby ecosystems (Balbin et al., 2023[20]). These environmental hazards resulting from mining activities can also generate significant social hazards, including population displacement, major disruptions to livelihoods and land‑use conflicts (Pascual, Domingo and Manejar, 2022[78]).
Limited compliance to existing environmental regulations has challenged the Philippine administration. Widespread environmental violations led to the closure of 22 of 41 open pit mines as well as a moratorium on new mining projects in 2017 (USGS, 2021[82]). Although nickel laterites are not extracted through open‑pit mining, some nickel operations, such as the Eramen Minerals Inc. (EMI) mine, were affected by the ban due to reported violations of mining and environmental regulations (Pascual, Domingo and Manejar, 2022[78]). The moratorium was reversed in 2021, encouraging new investments in the sector. Recent efforts have sought to distinguish the Philippines as a “greener” trading partner through more environmentally sound production practices.
In the Philippines, the increase in mining activities has been associated with impacts on water quality, agricultural land, and local food systems (CRI, 2025[22]; PH-EITI, 2025[75]). Indigenous groups and rural communities have faced human rights abuses, including attacks on environmental defenders, loss of access to clean water, flooding linked to mining-driven deforestation, and insufficient consultation (CRI, 2025[22]; Amnesty International, 2025[26]). Despite the significant wealth generated, compensation has often been inadequate, and the country is considered the most dangerous in Asia for land and environmental defenders (CRI, 2025[22]) (Amnesty International, 2025[26]). Nickel projects have been repeatedly linked to weak or contested FPIC practices, and communities have reported loss of livelihood due to disruption to fishing and agricultural activities caused by mining and processing, as well as health concerns (PH-EITI, 2025[75]). Concentrated ownership, including by PEPs, further contributes to conflict of interest and other governance risks in the Philippines (Empower, 2025[74]).
Operational and governance challenges may also impact foreign investment. Exploration activities by Woggle Corporation in Dupax del Norte, in the northern province of Nueva Vizcaya, were halted by local protests beginning in August 2025. Demonstrators cited lack of meaningful consultation, failure to obtain official authorisation and concerns over environmental impact. Despite initial crackdown by the local police, protests were supported by local lawmakers, environmental groups, and the local Catholic church diocese. In 2026, the government suspended the exploration permit and Woggle Corporation announced the withdrawal of all its equipment from Dupax del Norte following a Senate hearing (ABS CBN, 2026[83]).
Indonesia and the Philippines are both EITI implementing countries (EITI, 2026[84]). However, Indonesia was awarded a fairly low score in implementing the 2019 EITI Standard, in particular in the field of transparency. Although EITI acknowledges government’s efforts in disclosing extractive industry data, it highlights the scope to improve the comprehensiveness, disaggregation, accessibility, and reliability of the data (EITI, 2024[85]). In the Philippines, the EITI has worked to address hidden control and PEP risks through improved disclosure of social and environmental expenditures, subnational transfers and beneficial ownership of mining companies (PH-EITI, 2025[75]). In 2024, The EITI acknowledged efforts made to improve civil society engagement, highlighting that civil society participation at the subnational level remains weak and needs to be improved (EITI, 2024[86]).
Various nickel operations in Indonesia have taken steps to align with international standards and certification systems. To date, there are three mines participating in IRMA to varying degrees. Harita Nickel, an integrated mining and processing company, was the first mine in Indonesia to commit to an IRMA audit in 2024 (IRMA, 2024[87]). Since then, it has undergone a Stage 2 Independent Audit, currently in a corrective action period. Also in 2024, the PT Vale Sorowako Mine agreed to undertake an IRMA Stage 2 Independent Audit, with site visits planned for late 2025 (Vale, 2024[88]). Weda Bay Nickel conducted initial self-assessments in 2023, though no IRMA-led independent audit has been conducted to date (Weda Bay Nickel, 2026[89]). There are ten nickel facilities in Indonesia that conform to the RMI’s requirements for its Global Responsible Sourcing Due Diligence Standard, four of which have undergone RMI’s facility standard assessment (RMI, 2026[90]). PT CNGR Ding Xing New Energy and PT Indonesia Tsingshan Stainless Steel in the Indonesia Morowali Industrial Park and PT Eternal Nickel Industry in Weda Bay underwent independent third-party assessment of their supply chain management systems by the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters in 2025.
In recent years, mining and processing companies in the Philippines have taken notable steps to improve alignment with international assessments. As of 2025, all member companies of the Chamber of Mines of the Philippines committed to implementing Towards Sustainable Mining self-assessment reports spanning eight protocols (PH-EITI, 2025[75]). Despite this broad uptake of the TSM, engagement with other standards and certification schemes remains limited. No company has undergone RMI’s facility standard assessment (RMI, 2026[90]). There is currently one nickel mine in the Philippines that is taking initial steps to align with IRMA. Owned by the Nickel Asia Corporation, the Rio Tuba Nickel Mine, a joint venture between Nickel Asia Corporation (60%), PAMCO (36%) and Sojitz (4%), is currently undergoing a self-assessment within the IRMA framework (BHRC, 2025[91]).
Nearly nine in ten respondents active in the nickel supply chain indicated membership in at least one multi-stakeholder and industry initiative. The Responsible Minerals Initiative is most commonly cited in terms of membership as well as audits and assessments.
Note: This figure presents responses to survey Question 32 (“Have you been audited or assessed by one or more of the following sustainability initiatives?”) and Question 33 (“Are you a member of one or more of the following sustainability initiatives?”), for key company types and respondents active in the nickel supply chain. Multiple responses were permitted. “Other” write-in responses were reviewed and mapped to standardised initiative categories; one response could be mapped to more than one category where relevant. Survey data was collected between late 2025 and early 2026. Please refer to the methodology section for further detail.
Source: OECD-IEA Survey on Traceability in Critical Mineral Supply Chains
Tracing nickel products as they move along value chains presents distinct challenges with notable implications for both responsible sourcing and fiscal governance. As described above, this complexity stems from several reinforcing factors, namely the routine mixing of ores from different mines during transportation and processing, often opaque ownership structures, and limited coverage of existing responsible sourcing standards. In the context of these challenges, this section identifies gaps in the uptake of public and private traceability systems in Indonesia and the Philippines. These results are then contextualised using the survey data in the following chapter.
Traceability in nickel supply chains in Indonesia and the Philippines is in early stages. Developing traceability systems for nickel supply chains is complex due to the diverse sources of ore, varied processing pathways, but also the large diversity of economic sectors utilising nickel products. Although traceability for certain nickel produced in contexts of vertical integration may be more straightforward, both Indonesia and the Philippines present certain challenges (IEA-OECD, 2025[9]). In both countries, unprocessed nickel from multiple mines is often mixed either for transportation or smelting. This means that it is often impossible to differentiate between nickel that was produced according to specific standards or other requirements. Smelters’ need for varied ore sources to reach the required grade and industrial parks’ ownership structures also create significant challenges to full traceability of nickel supply chains (IEA-OECD, 2025[9]). The different levels of purity create distinct processing requirements to produce battery-grade nickel from these types of nickel, which increases the overall complexity of nickel supply chains.
Responsible sourcing requirements vary in their coverage of nickel types. The London Metal Exchange (LME) requirements are for the Class I nickel traded on the exchange, but this form of nickel may represent as little as 15% of global flows (Ferreira, 2025[92]). The EU Batteries Regulation will be complementary to the LME requirements since the EUBR addresses separate battery-grade nickel types, though stainless steel hovers around 70% of nickel use and consists primarily of Class II non-battery-grade nickel. Stainless steel’s lack of coverage by responsible sourcing requirements is an obstacle to traceability and responsible production in the overall nickel supply chain. Some exchanges are exploring trading in nickel sulphate, building on existing futures contracts in cobalt hydroxide (CME) and lithium hydroxide (LME and CME), but lack of liquidity in such markets is a challenge, potentially limiting traceability options (CME, 2025[93]).
Complex ownership structures further complicate the picture. In Indonesia, smelting is dominated by foreign-owned companies, whose ownership is complex and often opaque, stretching across multiple layers of corporate entities registered in multiple countries (C4ADS, 2025[64]). Recent efforts to trace ownership structures of refining operations in Indonesia found that an estimated 30% of company ownership structures were untraceable (Schreier et al., 2025[94]). Furthermore, there is evidence that contracts among companies along the nickel supply chain contain non-disclosure agreements that make tracing the flow of material along nickel supply chains more challenging (Sangadji, Rahayu and Paramarini, 2025[95]). The opacity of the ownership structures creates difficulties when applying international tax legislation such as transfer pricing which often relies on the definition of a related party to be applied. Appropriate traceability systems, tracking each mineral to the various beneficial owners could assist in alleviating this concern.
Indonesian authorities developed the government-led SIMBARA system to strengthen the traceability of coal and other mineral commodities. The system can support risk-based audits by several government agencies by identifying inconsistencies between production data, transport records and export sales, helping detect volume underreporting, grade misclassification, and related-party pricing that diverges from international benchmarks. However, limitations in reconciling production and smelting data, create potential opportunities for underreporting and diversion of flows. (see Box 4.3).
Indonesia's Sistem Informasi Mineral dan Batubara (SIMBARA) is a blockchain-based integrated digital platform connecting data from licensing, production, transportation, export and taxation across six government ministries and institutions. Led by the Ministry of Finance, it mandates data sharing across ministries overseeing mining operations, ports, exports, and processing, using the national taxpayer identification number (NPWP) as the common identifier linking entities across the supply chain. First implemented for coal in 2022, coverage was expanded in 2025 to include nickel and tin tracking from mines to domestic processing facilities, with cobalt planned for addition in 2025 (Government of Indonesia, 2025[96]).
What SIMBARA does in practice
SIMBARA automates a sequence of compliance checks across the licence to export lifecycle. It is linked to the government's digital mining quota records (RKAB), enabling real-time tracking of remaining production quotas and alerting authorities to discrepancies between output and sales data. Mining business permits (IUP/IUPK) are validated against payment of non-tax state revenues (PNBP), including royalties, dead rent, exploration fees, and approved work plans; port loading is checked against export allocations; and customs clearance is conditional on reconciliation between declared volumes and upstream records. Smelters are required to register their ore sourcing and originating mines, and are unable to unload shipments from operators with outstanding royalty payment obligations. An automated alert flags anomalies including export volumes inconsistent with declared production and mismatches between port, customs, and tax records, supporting risk-based audits across the Ministry of Finance, Customs, tax authorities, and the Ministry of Energy and Mineral Resources. Since its launch, SIMBARA has prevented state revenue losses of over IDR 8 trillion (approximately USD 500 million), comprising IDR 3.47 trillion from prevention of illegal mining, IDR 2.53 trillion from risk profiling of operators, and IDR 1.1 trillion from recovery of outstanding receivables.
Remaining limitations and takeaways
In the context of traceability across the entire supply chain, SIMBARA illustrates both the potential and the limits of Government-led traceability systems: it is a highly effective revenue monitoring tool, but its architecture was designed primarily for that purpose rather than for end-to-end mineral chain of custody traceability. The most significant gap is the absence of smelter-level mass balance reconciliation as the system cannot currently verify that declared smelter intake volumes are consistent with mine-level output. Without this, it cannot serve as a due diligence instrument for downstream buyers or supply chain compliance frameworks such as the OECD Due Diligence Guidance or the EU Battery Regulation. This gap has direct supply chain integrity implications. The processing sector faces overcapacity, and there are reports of illegally mined nickel, being introduced into formal supply chains (Hermawan, 2023[97]). Without smelter-level intake verification, illegally sourced material risks being laundered into compliant export streams.
Institutional fragmentation adds a further layer of complexity: under Law No. 3 of 2020, vertically integrated mines and smelters fall under the Ministry of Energy and Mineral Resources, while standalone smelters are regulated by the Ministry of Industry, a division that risks creating oversight gaps precisely at the mine-to-smelter interface that the system does not yet cover.
For countries developing comparable systems, SIMBARA offers three clear lessons:
1. Inter-agency data integration must be designed from the outset rather than retrofitted
2. Linking traceability to existing quota and licensing frameworks (as SIMBARA does via RKAB) multiplies compliance leverage at relatively low additional cost
3. Where possible, systems should integrate both fiscal revenue assurance and material chain of custody, as they are both necessary for a system to serve due diligence purposes and domestic revenue mobilisation simultaneously.
Complex and fragmented export routes make it challenging to trace nickel shipments out of the Philippines. Many mining companies reportedly use private shipping facilities and barges rather than centralised ports, which makes it challenging to identify which mining site produced the material contained in a given shipment (Empower, 2025[74]). Furthermore, the widespread use of intermediary companies to export nickel products makes it difficult to verify which actors are directly involved in nickel shipments as well as tracing ore to original production sites (Empower, 2025[74]).
Regarding traceability of recycled nickel, the recycling system for stainless steel, the main end‑use of mined nickel, is highly effective, and steel is the most recycled metal worldwide, suggesting that sufficient information reaches secondary‑market stakeholders to enable efficient processing (Watari et al., 2025[15]). By comparison, recycling of nickel from batteries, namely EV batteries, the second‑largest and fast‑growing application of nickel, remains underdeveloped as discussed in the lithium chapter. Recyclers have reported that traceability issues such as missing or incorrect labelling of batteries are among the key barriers to efficient battery recycling.
Ultimately, the nickel supply chain presents a more demanding environment for traceability. Blending of ores, diverse processing pathways, opaque ownership and other challenges leave significant portions of global flows outside of effective oversight. Indonesia’s SIMBARA platform and growing participation in international audit programmes provide a foundation, but the gap between traceability potential and implementation is wider than for lithium, with much higher consequences at stake through inaction. These findings inform the targeted recommendations for nickel in chapter 6.
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