Indonesia and the Philippines formalise a coordinated nickel corridor
25 May 20266 min read
Summary
- The Asosiasi Penambang Nikel Indonesia (APNI) and the Philippine Nickel Industry Association signed a Memorandum of Understanding on Strategic Nickel Industry Development Cooperation on 7 May 2026 in Cebu, witnessed by Indonesia's Coordinating Minister Airlangga Hartarto and Philippine Trade and Industry Secretary Maria Cristina Roque.
- The agreement sets a structured framework connecting Philippine upstream ore with Indonesian downstream smelting capacity, at a time when Indonesia imported 15.33 million tonnes of Philippine ore in 2025.
- Nickel is the metal that determines how much energy an EV battery can store; with the two countries accounting for 73.6% of global nickel production, any move to align their supply would reach battery makers’ costs through 2027.
Indonesia and the Philippines have formalised a coordinated nickel supply corridor under a Memorandum of Understanding signed in Cebu on 7 May 2026. The signing was witnessed by Indonesia’s Coordinating Minister for Economic Affairs Airlangga Hartarto and Philippine Trade and Industry Secretary Maria Cristina Roque, and the document formalises a partnership between the Asosiasi Penambang Nikel Indonesia (APNI) and the Philippine Nickel Industry Association (PNIA). According to United States Geological Survey (USGS) data, the two countries together accounted for 73.6% of global nickel production in 2025.
The agreement gives the mining associations of the world’s two largest nickel producers a standing channel to share market information and develop joint projects. That matters most to battery makers and stainless steel mills that buy ore or processed nickel from both countries, and the reason starts with what nickel does inside an electric vehicle battery.
Why nickel is the metal that defines EV battery range
Most electric vehicles sold today run on a battery chemistry called NMC, short for Lithium Nickel Manganese Cobalt Oxide. The cathode is the part of the battery that stores energy when the vehicle is charging and releases it when the vehicle is driving, and nickel is the metal that determines how much energy the cathode can hold. The Nickel Institute reports that nickel is the primary driver of energy density inside the cathode, meaning that for a fixed-size battery pack, more nickel allows the vehicle to travel further between charges.
The industry trend is to push nickel content higher. The NMC 811 chemistry that dominated EV sales in 2022 used 80% nickel in the cathode. Tesla and other leading manufacturers are shifting to NMC 955, which raises the nickel share to 90%. Higher nickel content delivers longer driving range without a larger battery, and reduces the cobalt and manganese the cathode requires. The trade-off is process complexity and material cost, both of which depend on a stable nickel supply. Korean producers Samsung SDI, LG Energy Solution and SK On, the Chinese producers CATL and BYD, and the Japanese producer Panasonic all build their cathode strategies around assumptions about Indonesian nickel availability through 2027.
That dependency makes the IndoPhil corridor a procurement question for battery makers as well as a trade-policy one. Any move by the two countries to align their supply would reach across 73.6% of global production and into the input cost of the metal that sets how far the next generation of EVs can drive.
What the MoU covers
According to Coordinating Minister Airlangga Hartarto, as reported by the Jakarta-based news magazine Tempo, the MoU on Strategic Nickel Industry Development Cooperation covers four areas: exchanging information to stabilise regional and global nickel trade, jointly developing downstream nickel technology, making use of by-products from nickel processing, and joint training to build the industry’s workforce. The published reports of the signing mention no ore volumes or prices.
Indonesia Business Post notes that the corridor is positioned to feed Indonesia’s HPAL (high-pressure acid leach) processing plants, which produce the mixed hydroxide precipitate used in lithium-ion cathode manufacturing.
Why Indonesia needs Philippine ore now
Indonesia’s 2026 mining quota allocation under the Rencana Kerja dan Anggaran Biaya (RKAB) process came in materially below 2025 production levels, with the Ministry of Energy and Mineral Resources framing the reduction as an environmental and reserve-management measure. The operational consequence for downstream operators is that Indonesian smelters had begun sourcing additional ore from external suppliers, including the Philippines, by mid-2025 to maintain processing capacity. The 7 May MoU formalises a trade that was already running on short-term terms. Statistics Indonesia (BPS) recorded 5.19 million tonnes of nickel ore imports from the Philippines in the first half of 2025, according to Indonesia Business Post.
Indonesia Business Post describes the agreement as a transition from short-term transactional ore trade towards a longer-term partnership focused on feedstock security. The published terms, as reported by that outlet and by Indonesia’s state news agency ANTARA, include no volumes or prices. Any gain for Philippine producers therefore depends on the supply contracts that follow. Cebu Daily News reported in May 2026 that Philippine nickel producers had been operating below capacity in 2024 and early 2025 due to weakened Chinese demand. If the corridor steers more Philippine ore to Indonesian smelters, producers would depend less on Chinese buyers and more on Indonesian ones, which carries different risks but widens the buyer base.
What this means for battery and stainless steel buyers
For EV battery cell makers in Korea, Japan and China, the exposure is on price. If the two industries use their new channel to align ore sales, price competition between Philippine and Indonesian ore could narrow, and Indonesian mixed hydroxide precipitate prices would follow a shared input cost more closely. Because nickel is the primary driver of cathode energy density, higher-nickel formulations such as NMC 955 would be the most exposed to any such shift. The published reports of the agreement mention no prices, so buyers will see whether this happens in trade and price data over the coming year.
For stainless steel mills in China, Japan and Korea that source nickel pig iron and ferronickel from Indonesia, the same logic applies. Indonesian ferronickel pricing has historically reflected the country’s own ore costs. Indonesian smelters are drawing more heavily on Philippine ore as domestic mining quotas shrink. If the corridor moves that trade from spot deals onto longer-term arrangements, ferronickel prices could steady through 2026 and 2027 at a higher floor than the 2023-2024 trough.
What to watch through 2026
Three things will show whether the corridor changes how nickel is traded. First, whether monthly shipments of Philippine ore to Indonesia keep rising from their 2025 level. Second, whether the information exchange set up by the MoU produces shared price or supply data that buyers can see. Third, whether Chinese stainless steel mills, the largest historical buyer of Philippine ore, respond by securing alternative supply from New Caledonia or Russia. The first will be visible in Statistics Indonesia (BPS) trade data through 2026, and the third in Chinese ferronickel import data through the second half of 2026.
The procurement timing question is open for the buyers who will lock in 2027 battery materials volumes. Two industry associations, with ministers from both governments present at the signing, now have a formal channel to coordinate the flow of ore between the world’s two largest nickel producers. The volumes that get committed before the second half of 2026 will set the bargaining baseline for the period after.
Correction, 24 September 2026: An earlier version of this article stated that the agreement commits to a minimum monthly supply of 200,000 metric tonnes from June 2026; no primary source supports that figure. It also described the MoU as setting prices between two governments; it is an agreement between industry associations. It also listed the MoU’s working areas incorrectly and presented coordinated prices and supply as settled; the agreement covers information exchange, technology, by-products and training, and the published reports of it mention no prices or volumes. These have been corrected.
The agreement gives the mining associations of the world’s two largest nickel producers a standing channel to share market information and develop joint projects. That matters most to battery makers and stainless steel mills that buy ore or processed nickel from both countries, and the reason starts with what nickel does inside an electric vehicle battery.
Why nickel is the metal that defines EV battery range
Most electric vehicles sold today run on a battery chemistry called NMC, short for Lithium Nickel Manganese Cobalt Oxide. The cathode is the part of the battery that stores energy when the vehicle is charging and releases it when the vehicle is driving, and nickel is the metal that determines how much energy the cathode can hold. The Nickel Institute reports that nickel is the primary driver of energy density inside the cathode, meaning that for a fixed-size battery pack, more nickel allows the vehicle to travel further between charges.
The industry trend is to push nickel content higher. The NMC 811 chemistry that dominated EV sales in 2022 used 80% nickel in the cathode. Tesla and other leading manufacturers are shifting to NMC 955, which raises the nickel share to 90%. Higher nickel content delivers longer driving range without a larger battery, and reduces the cobalt and manganese the cathode requires. The trade-off is process complexity and material cost, both of which depend on a stable nickel supply. Korean producers Samsung SDI, LG Energy Solution and SK On, the Chinese producers CATL and BYD, and the Japanese producer Panasonic all build their cathode strategies around assumptions about Indonesian nickel availability through 2027.
That dependency makes the IndoPhil corridor a procurement question for battery makers as well as a trade-policy one. Any move by the two countries to align their supply would reach across 73.6% of global production and into the input cost of the metal that sets how far the next generation of EVs can drive.
What the MoU covers
According to Coordinating Minister Airlangga Hartarto, as reported by the Jakarta-based news magazine Tempo, the MoU on Strategic Nickel Industry Development Cooperation covers four areas: exchanging information to stabilise regional and global nickel trade, jointly developing downstream nickel technology, making use of by-products from nickel processing, and joint training to build the industry’s workforce. The published reports of the signing mention no ore volumes or prices.
Indonesia Business Post notes that the corridor is positioned to feed Indonesia’s HPAL (high-pressure acid leach) processing plants, which produce the mixed hydroxide precipitate used in lithium-ion cathode manufacturing.
Why Indonesia needs Philippine ore now
Indonesia’s 2026 mining quota allocation under the Rencana Kerja dan Anggaran Biaya (RKAB) process came in materially below 2025 production levels, with the Ministry of Energy and Mineral Resources framing the reduction as an environmental and reserve-management measure. The operational consequence for downstream operators is that Indonesian smelters had begun sourcing additional ore from external suppliers, including the Philippines, by mid-2025 to maintain processing capacity. The 7 May MoU formalises a trade that was already running on short-term terms. Statistics Indonesia (BPS) recorded 5.19 million tonnes of nickel ore imports from the Philippines in the first half of 2025, according to Indonesia Business Post.
Indonesia Business Post describes the agreement as a transition from short-term transactional ore trade towards a longer-term partnership focused on feedstock security. The published terms, as reported by that outlet and by Indonesia’s state news agency ANTARA, include no volumes or prices. Any gain for Philippine producers therefore depends on the supply contracts that follow. Cebu Daily News reported in May 2026 that Philippine nickel producers had been operating below capacity in 2024 and early 2025 due to weakened Chinese demand. If the corridor steers more Philippine ore to Indonesian smelters, producers would depend less on Chinese buyers and more on Indonesian ones, which carries different risks but widens the buyer base.
What this means for battery and stainless steel buyers
For EV battery cell makers in Korea, Japan and China, the exposure is on price. If the two industries use their new channel to align ore sales, price competition between Philippine and Indonesian ore could narrow, and Indonesian mixed hydroxide precipitate prices would follow a shared input cost more closely. Because nickel is the primary driver of cathode energy density, higher-nickel formulations such as NMC 955 would be the most exposed to any such shift. The published reports of the agreement mention no prices, so buyers will see whether this happens in trade and price data over the coming year.
For stainless steel mills in China, Japan and Korea that source nickel pig iron and ferronickel from Indonesia, the same logic applies. Indonesian ferronickel pricing has historically reflected the country’s own ore costs. Indonesian smelters are drawing more heavily on Philippine ore as domestic mining quotas shrink. If the corridor moves that trade from spot deals onto longer-term arrangements, ferronickel prices could steady through 2026 and 2027 at a higher floor than the 2023-2024 trough.
What to watch through 2026
Three things will show whether the corridor changes how nickel is traded. First, whether monthly shipments of Philippine ore to Indonesia keep rising from their 2025 level. Second, whether the information exchange set up by the MoU produces shared price or supply data that buyers can see. Third, whether Chinese stainless steel mills, the largest historical buyer of Philippine ore, respond by securing alternative supply from New Caledonia or Russia. The first will be visible in Statistics Indonesia (BPS) trade data through 2026, and the third in Chinese ferronickel import data through the second half of 2026.
The procurement timing question is open for the buyers who will lock in 2027 battery materials volumes. Two industry associations, with ministers from both governments present at the signing, now have a formal channel to coordinate the flow of ore between the world’s two largest nickel producers. The volumes that get committed before the second half of 2026 will set the bargaining baseline for the period after.
Correction, 24 September 2026: An earlier version of this article stated that the agreement commits to a minimum monthly supply of 200,000 metric tonnes from June 2026; no primary source supports that figure. It also described the MoU as setting prices between two governments; it is an agreement between industry associations. It also listed the MoU’s working areas incorrectly and presented coordinated prices and supply as settled; the agreement covers information exchange, technology, by-products and training, and the published reports of it mention no prices or volumes. These have been corrected.