Indonesia, the largest supplier of nickel globally, has intensified its state control over the country's nickel sector in response to illegal exploitation of natural resources reminiscent of corruption and mismanagement. This move marked a shift in 2025, following years of leveraging the nation's rich nickel reserves to develop a domestic electric vehicle (EV) industry. The Indonesian government cited issues with many mining and plantation licenses, claiming they were associated with bribery and not properly approved. In its crackdown, authorities have seized over 4 million hectares of land used for mines and plantations and imposed significant fines, aiming to cleanse the sector of illegal activities. As the global market was increasingly influenced by the U.S. and China vying for critical minerals, Indonesia had previously restricted raw nickel ore exports, leading to an explosion of investment in nickel refining, particularly from China. By 2024, Indonesia's share of global nickel supply surged to around 60%, doubling since 2020. The country, particularly the island of Sulawesi, is critical for the nickel market, with its reserves accounting for more than half of the world's nickel production. Notably, nickel matte exports to China saw a dramatic rise, emphasizing Indonesia's pivotal role in the battery technology supply chain used in electric vehicles. However, the rapid pace of mining and processing development in Indonesia raised concerns among environmentalists, as mining activities between 2001 and 2020 reportedly led to the deforestation of approximately 370,000 hectares of forests, the highest loss globally. Industry experts view the government's recent actions as a response to climate risks and illegal practices rather than actual environmental protection. This brings the future of Indonesia's nickel industry into question, with foreign investors watching warily for signs of stability and accountability in the sector. Despite the significant market advantages of its nickel supply, challenges persist for Indonesia's ambitions to establish itself as a global leader in the electric vehicle battery production industry. Limited public charging infrastructure, a withdrawal by LG Energy Solution from a major battery investment deal, and uncertainty regarding the safety of investment conditions have all contributed to the complexity of operating in Indonesia's nickel market. As foreign investments slow, domestic policymakers are faced with addressing a balancing act of attracting investment while ensuring resource management and sustainability.