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Chinese companies that reshaped Indonesia into the world’s dominant nickel hub are increasingly turning their attention to Africa, as policy tightening in Jakarta begins to unsettle the investment model that underpinned the sector’s rapid expansion.
The shift reflects growing uncertainty around Indonesia’s regulatory direction, where tighter ore export controls, revised pricing frameworks and proposed tax adjustments have raised concerns over long-term project economics. Foreign direct investment into the country fell 6% in 2025, underscoring the impact of a more interventionist policy environment. Against this backdrop, major Chinese players are actively exploring alternative jurisdictions to replicate Indonesia’s integrated industrial park model elsewhere.
Tsingshan Group, the world’s largest stainless steel producer and a key architect of Indonesia’s nickel boom, has submitted a multi-billion dollar proposal to the government of Madagascar. The plan envisions the development of an industrial park focused on nickel and other strategic minerals, structured along the same model as its Morowali and Weda Bay operations in Indonesia. While the proposal remains under review and no permits have been issued, Madagascar’s mines ministry confirmed that a cooperation memorandum was signed earlier in the year.
In parallel, Hong Kong-listed Lygend Resources is in discussions to acquire a stake in Tanzania’s Kabanga nickel project from US-based Lifezone Metals. Kabanga is regarded as one of the world’s largest undeveloped nickel sulphide deposits, with Lifezone estimating development costs of nearly $1 billion and a six-year timeline to reach planned output of around 50,000 tonnes per annum. If concluded, both the Madagascar and Tanzania opportunities would mark the first major nickel investments by these Chinese-linked groups outside Indonesia, signalling a broader geographic rebalancing of capital within the battery metals supply chain.
The move also highlights a structural shift in global nickel investment flows. Indonesia’s emergence as the dominant producer was built on a combination of resource endowment, policy support and Chinese capital inflows that enabled rapid downstream integration. However, as policy settings tighten, investors are beginning to reassess jurisdictional risk and diversify exposure. Africa is emerging as a key beneficiary of this rotation, albeit with its own set of challenges. Madagascar, currently under military rule following last year’s coup, presents elevated political risk despite its resource potential. Tanzania’s Kabanga project, meanwhile, has remained undeveloped for decades despite its scale, reflecting the complexities of financing and execution in frontier mining environments.
Even so, the strategic logic is based on the growing demand for nickel, driven by stainless steel and electric vehicle supply chains, Chinese investors are seeking new footholds in jurisdictions capable of hosting large-scale, long-life assets. The result is an emerging shift in capital allocation, from a concentrated Indonesian hub toward a more diversified African pipeline of projects. While execution risks remain significant, the direction of travel suggests Africa is increasingly being viewed as the next frontier in the global nickel value chain.
