The transformation of Indonesia’s nickel industry through downstream industrialization has created an integrated industrial ecosystem that attracts large-scale global investment. As related-party transactions in the nickel mining and processing sector continue to increase, the need for transfer pricing analysis has become increasingly important. This article discusses the use of nickel industry comparative data as a reference in the preparation of Transfer Pricing Documentation (TP Documentation), particularly in assessing the arm’s length nature of profit levels and related-party transactions. External comparable data sourced from TP Catalyst provides insights into industry profitability and business characteristics relevant to transfer pricing practices in Indonesia. In addition, commodity price volatility and pressure on profit margins highlight the importance of accurate benchmarking in tax risk mitigation. Therefore, governance quality, financial transparency, and documentation compliance have become essential factors in maintaining investor confidence and supporting the sustainability of Indonesia’s nickel industry.
Behind the rapid growth of electric vehicles and the global energy transition, one major question is increasingly becoming the focus of global competition among nations: whoever controls nickel will control the future of the supply chain.
Indonesia appears to have recognized the direction of history earlier than many other countries. Through downstream industrialization policies, Indonesia is no longer merely an exporter of raw ore, but is gradually transforming into a new center of gravity for the global metals industry. Industrial zones such as Indonesia Morowali Industrial Park (IMIP), Virtue Dragon Nickel Industrial Park (VDNIP), and Indonesia Weda Bay Industrial Park (IWIP) symbolize how a developing country can build an integrated industrial value chain: from mining and smelting to nickel-based manufacturing.
This integration model is not solely about industrialization. It is about geopolitical efficiency. When production chains are consolidated within a single ecosystem, logistics costs decline, energy efficiency improves, and product prices become more competitive in global markets. It is therefore unsurprising that Indonesia’s production costs for semi-finished nickel products and stainless steel are now among the lowest in the world.
However, behind this industrial surge lies another compelling story: the massive inflow of global capital. Major Chinese corporations such as Tsingshan Holding Group, Huayou Cobalt, CATL, and CNGR Advanced Material no longer view Indonesia merely as a source of raw materials, but increasingly as a strategic manufacturing hub for competing in the electric vehicle era.
This phenomenon reflects a new reality: modern investment no longer seeks only natural resources, but also industrial ecosystems capable of reducing costs and accelerating global distribution.
The Greek philosopher Heraclitus once said, “There is nothing permanent except change.” This statement feels particularly relevant to the transformation of Indonesia’s nickel industry. Regions once known primarily as mining areas are now evolving into industrial centers, new hubs of urbanization, and magnets for international investment.
Nevertheless, the dynamics of the nickel industry do not always move in a straight line. Demand for electric vehicle batteries continues to rise, yet volatility in global commodity prices forces the industry to operate within highly aggressive cycles. Many nickel companies have recorded rising sales volumes, while profit margins remain under pressure due to price fluctuations and increasingly intense global competition.
As a basis for analysis and strategic reference, the following comparative nickel industry data sourced from TP Catalyst is presented.
| No | Company | Country | Operating Revenue (IDR) | Profit/Loss (IDR) | ||||
| Last Available Year | Year -1 | Year -2 | Last Available Year | Year -1 | Year -2 | |||
| 1 | LYGEND RESOURCES & TECHNOLOGY CO., LTD | China | 96,820,477,704 | 64,863,959,372 | 45,666,329,176 | 6,857,908,948 | 3,926,136,069 | 2,268,861,963 |
| 2 | XINJIANG XINXIN MINING INDUSTRY CO., LTD. | China | 5,078,075,662 | 4,364,731,146 | 6,417,490,384 | 385,160,779 | 350,337,631 | 1,673,612,080 |
| 3 | LONGHUA COUNTY XINCUN MINING CO., LTD. | China | 1,788,705,673 | 1,602,711,789 | 1,839,891,666 | 693,350,957 | 569,871,605 | 434,919,730 |
| 4 | HEILONGJIANG LUJIU MINING CO., LTD. | China | 1,593,297,370 | 2,139,627,780 | 2,332,354,209 | 565,335,320 | 911,389,246 | 1,247,373,171 |
| 5 | XINJIANG YAKESI RESOURCES DEVELOPMENT CO., LTD. | China | 945,892,721 | 1,382,396,037 | 1,148,661,153 | 5,286,922 | 365,156,926 | 234,785,426 |
| 6 | JIULONG COUNTY YALONG RIVER MINING CO., LTD. | China | 892,114,974 | 804,616,148 | 789,159,017 | 277,764,649 | 257,872,672 | 260,637,133 |
| 7 | GUIXI BAOJIA MINING CO., LTD. | China | 460,678,042 | 404,250,918 | 402,115,623 | 148,916,017 | 133,796,823 | 147,796,776 |
| 8 | GUANGXI BEISHAN MINING DEVELOPMENT CO., LTD. | China | 456,597,235 | 1,287,906,225 | 1,220,964,850 | 683,456,456 | 465,766,427 | 222,510,820 |
| 9 | GANLUO COUNTY ERJIADIJI LEAD-ZINC MINING CO., LTD. | China | 419,289,463 | 434,563,831 | 337,350,057 | 99,969,420 | 119,268,278 | 61,597,016 |
| 10 | XIANGHUALING TIN INDUSTRY CO., LTD. | China | 408,400,117 | 505,914,706 | 485,451,682 | 84,194,759 | 153,342,130 | 160,645,018 |
This database is widely used by the Directorate General of Taxes (DGT) of Indonesia, thereby increasing the acceptability of comparables. The data is highly relevant for use as external comparables in Transfer Pricing Documentation (TP Documentation), particularly for testing the arm’s length nature of profit levels of mining and nickel processing companies engaged in related-party transactions.
In this context, the quality of corporate governance becomes increasingly important. Global investors no longer assess only the size of nickel reserves, but also evaluate the transparency of financial reporting, tax compliance, and the fairness of related-party transactions.
Management expert Peter Drucker once reminded us, “What gets measured gets managed.” In an era of industrialization worth trillions of rupiah, transfer pricing documentation is no longer merely a compliance document, but has become part of a company’s risk mitigation and reputation protection strategy.
Ultimately, the biggest question is no longer whether Indonesia is rich in nickel. The world already knows the answer. The far more important question is whether Indonesia can sustain this momentum to move up the value chain and become a major player in the global industry, rather than merely serving as a low-cost production location for the world.
The history of industrialization is often won not by the countries with the richest natural resources, but by those most prepared to sustain momentum.
