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China's nickel import mix already includes Russia, Australia, South Africa, and New Caledonia, offering some buffer. But the real hedge is technology substitution—BYD's second-generation blade battery reduces nickel dependence, directly undermining Indonesia's strategic leverage over the EV supply chain.
Indonesia's leverage is weaker than it appears. Chinese firms control the core smelting technology and process parameters—local operators cannot replicate them. If Chinese capital and expertise withdraw, Indonesia's output quality drops, as seen with impurity levels rising by 0.8 percentage points, forcing discounts for low-grade material.
The real question is whether Indonesia can enforce these quotas. Reports suggest approved RKAB quotas could be revised upward from 2.6 billion tonnes to 3.6 billion, which would quickly deflate the supply-tightening narrative. Watch for policy reversals—they have happened before.