26 ASIAN LEGAL BUSINESS – JUNE 2023 WWW.LEGALBUSINESSONLINE.COM INDONESIA A flourishing nickel mining sector in Indonesia, triggered in significant part by the booming electric vehicle (EV) industry and the ongoing green energy transition, is having a major impact on privately held companies launching initial public offerings (IPOs) and helping them raise capital from global investors eager to join the green energy economy. Powered by nickel, Indonesian mining companies have already raised 100 times more money in 2023 than in the previous two years. Indonesia introduced a ban on nickel exports in 2020, but it was quickly challenged in international courts, proving how relevant the mineral has become for the future of a world that demands it not only for electricity storage but also for traditional construction. “These measures unduly and illegally restrict EU access to raw materials needed for stainless steel production and distort world market prices of ores,” says the European Commission in late 2022, after a WTO panel ruled against nickel export limitations introduced by the government in Jakarta. Despite the legal dispute around nickel ore exports, Indonesia’s EV battery industry has continued gaining traction and attracting worldwide attention from investors. The mineral is a cornerstone for several large-scale projects in the country, which stands as the largest consumer of nickel ore in the globe. Adjusting to this changing dynamic, Southeast Asia has taken steps to adjust its legal framework to cope with the challenges that lay ahead for the sector. “The Indonesian Government has introduced a range of strategic initiatives to support the development of the downstream EV battery value chain, including banning the export of unprocessed nickel to encourage the production of domestic value-added products and imposing a progressive export tax on low content nickel products to further encourage downstream investment in Indonesia,” Jeremy Wang, counsel at Latham & Watkins in Singapore, tells ALB. “To take advantage of the government’s focus on developing the downstream nickel industry, we see issuers expanding their operations along the EV battery value chain through the development of downstream expansion projects,” adds Wang, who explains that for such issuers, as their pipeline of downstream projects may still be under construction or development, projections may have to be presented in a technical report to educate investors on the potential upside of these pipeline projects. A May 2023 report by Standard & Poor’s shows that Indonesian mining companies have raised a staggering $1.36 billion in 2023, compared to just $13.8 million in 2022 and $13.1 million in 2021. NICKEL ALL THE WAY Nickel companies are a driving force behind what is being seen as a record year for public listings in Indonesia, with the listings pointing to the opportunities in Indonesia’s blossoming nickel industry. And this is keeping both mining and capital markets lawyers busy. BY ASIAN LEGAL BUSINESS A worker watches as trucks load up raw nickel near Sorowako, Indonesia’s Sulawesi island, January 8, 2014. REUTERS/Yusuf Ahmad