Indonesia, Brazil, and Ghana Close Doors on China—Chinese Outbound Firms Now Targeted Globally!

Added: 2026-05-08

[00:00:00]Over the past decade, Chinese companies have poured large amounts of capital and technology into Indonesia's nickel industry chain. The structure has become highly concentrated and tightly bound together. The problem is that this high share high dependence model becomes especially fragile when geopolitical conditions change. Once policy direction shifts, risk can escalate quickly. At the start of 2026, Indonesia carried out a major overhaul of its nickel sector.

[00:00:26]The annual mining quota was cut from 380 million tons in 2025 to 250 million tons, a drop of 34%. In the core mining area of Waya Bay, output was reduced from 40 million tons to 12 million tons, a sharp decline of 71%. At the same time, export controls were tightened, smelting capacity was restricted, and a floating resource tax linked to nickel prices was introduced. These measures were rolled out together as a coordinated package. This series of policies is not random. It applies pressure on both upstream resources and mid-stream production capacity. In nickel processing, Chinese invested firms have long accounted for about 70% of smelting capacity, making them the most directly and heavily affected. Then came the new regulation issued on April 15th. The correction factor for the benchmark price of nickel ore was raised from 17% to 30%. At the same time, associated metals such as cobalt, iron, and chromium were all included in pricing and taxation. In simple terms, the era of relying on lowcost resource advantages has largely come to an end.

[00:01:34]Market estimates are straightforward.

[00:01:36]Prices for low-grade laterite nickel ore have surged by more than 220%.

[00:01:41]While high-grade ore prices have nearly doubled. On the production side, whether using hydromeergical or pyometallergical processes, costs have risen across the board. The result is that many Chinese investor projects that once relied on scale advantages are now pushed to the edge of losses. Companies such as Sing Shan Holding Group, Huayo Cobalt, and Legend Resources are not only seeing profits squeezed, but are also facing the risk of supply chain disruption.

[00:02:09]Some plants are even operating at a loss from the moment they begin production, making it difficult to recover earlier investments in the short term. Viewed purely from an industrial perspective, these policies could be seen as normal adjustments by a resourcerich country.

[00:02:23]The issue, however, is that Indonesia has also been making frequent moves on the diplomatic front at the same time.

[00:02:29]In February 2026, Indonesia and the United States formally signed a reciprocal trade agreement, setting out arrangements on critical mineral supply, industrial cooperation, and market access. The agreement also specifically states that restrictive measures will be taken against foreign enterprises that harm US trade interests, and that foreign invested capacity will be regulated. Given the dominant position of Chinese invested firms in Indonesia's nickel processing sector, it is not hard to see who these clauses are effectively aimed at. After that, Indonesia's domestic policies moved quickly in step, clearly aligning with the agreement.

[00:03:04]This shows that policy and diplomacy are being coordinated. Overall, against the backdrop of escalating USChina competition, Indonesia is no longer maintaining its previous balancing strategy. Instead, it is gradually moving closer to the United States while distributing partnerships in key resource sectors. Looking back at how Chinese invested enterprises originally positioned themselves, the model relied mainly on three factors: lowcost resources, a relatively loose policy environment, and highly concentrated investment. In favorable conditions, this approach can indeed scale up quickly. But once the external environment changes, risks are amplified just as quickly. In today's environment, this model is becoming increasingly difficult to sustain. Indonesia's policy shift is in essence a direct challenge to this high dependence model. Through quotas, taxation, and capacity controls, Indonesia is reclaiming leadership over its industry while creating room for new international partnerships. From a broader perspective, this is not an isolated case, but a reflection of the ongoing restructuring of global supply chains. As major power competition intensifies, resourcerich countries will naturally reassess their positions and redistribute interests. In the past, the Chinese Communist Party pushed industrial expansion and resource integration worldwide, building certain advantages. At the same time, however, it also accumulated structural frictions. The sharp turn in Indonesia's nickel policy is a typical example from heavy reliance on Chinese investment to active adjustment and a shift towards the United States. For Chinese invested enterprises, once external policies no longer support the original model, past advantages can quickly turn into burdens. This is not only a commercial shock, but also a sign that the logic behind their global expansion is being re-examined. To sum it up with a phrase often used by Chinese officials, it's like lifting a stone only to drop it on one's own foot. Turning to South America, a sensitive development has also emerged there. Brazil has recently sent a clear signal. It welcomes cooperation in developing rare earth resources. At the same time, it has set a firm condition. Anyone who wants to participate must first provide core smelting and processing technology. In other words, any foreign company seeking to take part in Brazil's rare earth development must first build processing facilities locally, establish the full industrial chain on the ground, and allow Brazil to gain access to the relevant technology. On the surface, this condition applies equally to all countries and appears fair. But in reality, if one truly understands the global distribution of technology, it becomes clear who this policy is aimed at. According to Hong Kong media reports, the Brazilian government has formally established entry rules for cooperation in critical minerals. The core requirements are twofold.

[00:05:59]Technology transfer and local industrial development. The official stance is that Brazil is not choosing sides, treating China, the United States, and Europe equally. However, the reality is that only a few countries possess a complete rare earth smelting and processing system. Put simply, this policy effectively targets China. Looking at Brazil's own position, it is a major global resource holder. Its reserves of rare earths and graphite rank among the world's largest and its nickel resources are the third largest globally. Overall, it controls about 10% of the world's critical minerals. As the transition to new energy accelerates, the value of rare earths continues to rise. Whether in electric vehicles, wind power, or advanced manufacturing, these materials are indispensable. In this sense, Brazil is holding a very strong strategic card.

[00:06:48]Brazilian President Luis Enasio Lula D Silva has repeatedly stated that the country no longer wants to remain just a raw material exporter, but aims to move higher up the industrial chain. The condition set this time can be summed up in one sentence, exchange resources for technology. From a policy design perspective, requiring foreign investors to build local factories and create jobs is a common approach among resourcerich countries. The key difference now is that core technology transfer has been made a direct precondition. This fundamentally changes the nature of cooperation. Looking at the actual structure of the global industrial chain, upstream resources are available in many countries. However, mid-stream smelting and separation processing are highly concentrated in terms of both technology and capacity. China has invested in this field for years, building a complete system and gaining a clear advantage. In contrast, other countries face limitations. The United States has long talked about rebuilding supply chains, but progress in smelting and processing remains limited.

[00:07:51]Australia has abundant resources, yet often exports raw materials and then imports processed products. As a result, Brazil's technology transfer requirement is in practical terms aimed at Chinese invested enterprises. Looking at the broader timeline, this development comes amid the global restructuring of supply chains. In recent years, the United States has been pushing to rebuild its critical mineral system with a core goal of reducing reliance on China's supply chain while strengthening ties with resourcerich countries. In this process, Brazil has begun to reposition itself.

[00:08:25]On the one hand, it maintains an outward stance of neutrality. On the other hand, through institutional design, it is increasing its bargaining power while redistributing benefits among different countries. The advantage of this approach is clear. It avoids overd dependence on any single partner while giving Brazil greater control at the negotiating table for Chinese invested enterprises that are already deeply embedded. However, the pressure is immediate. The previous model built on resource supply and capacity advantages now needs to be reassessed. Rare earth's smelting and processing capabilities are built over time and are directly tied to industrial security and competitiveness.

[00:09:03]In other words, these technologies themselves are strategic assets. By making these technologies a condition for cooperation, Brazil has significantly raised both the cost and risk of participation. For Chinese invested enterprises, whether to accept such terms is no longer just a business decision, but one that will directly affect their future position in the global industrial chain. At a deeper level, this also reflects a broader issue. In the past, the Chinese Communist Party's global resource strategy has often relied on capital exports and capacity expansion, leading to highly concentrated investments in certain regions. However, there has been relatively less anticipation of institutional change, policy risks, and geopolitical shifts. Once partner countries adjust their strategies, those advantages can quickly weaken. Brazil is a clear example of this. Turning to Africa, developments there are even more critical. On April 22nd, Reuters revealed a major development. Ghana's mining regulator has issued a final ultimatum to three major gold giants, including China's Zidzing Mining. The requirement is straightforward. By December 2026, the most critical mining operations must be fully handed over to local Ganaian contractors. Failure to comply would lead to the most severe outcome, a direct halt in production. At first glance, many may think this is simply outsourcing part of the operations. In reality, it is not. When viewed alongside Ghana's policies over the past year, it becomes clear that this is a deliberate redistribution of industrial power. Ghana is not expelling foreign investors. Instead, it is reclaiming control over the most critical, most profitable, and the most strategic segments. This directly challenges the logic that has long underpinned China's overseas resource strategy. In the past, many Chinese invested enterprises believed that securing mining rights meant securing control. Ghana's approach now makes it clear. The mind may still be yours, but how it's operated, who carries out the work, and who earns the service profits are no longer your decision. As early as January 2025, Ghana had already begun taking action. At that time, the sixth edition of the local procurement list directly restricted the self-operated model of open pit mining, requiring a shift to contract mining with contractors that must be Ganaan companies controlled by local stakeholders. The same applies to underground mining, which must include local shareholders holding no less than 50%. This was not a sudden policy change, but one introduced with a transition period. Now, with December 2026 formally written into the official notice, the countdown has effectively begun. In other words, Ghana's localization has moved beyond hiring local workers and purchasing local goods to localizing core operations. For foreign investors, this amounts to a rewriting of the rules. So why does Ghana have the confidence to do this?

[00:11:56]The answer is simple. It has strong leverage. Ghana is Africa's largest gold producer. In 2025, its gold output reached 6 million ounces, setting a new record. With gold prices remaining high, Ghana's bargaining power continues to grow. This naturally raises a key question. As gold prices rise and production increases, how much of that value actually stays within the country?

[00:12:20]In response, Ghana has begun tightening its policies across the board. In October 2025, it launched the most comprehensive mining audit in a decade.

[00:12:29]In March 2026, it shifted gold royalties from a fixed 5% to a price linked range of 5 to 12%. The higher the gold price, the greater the government share. At the same time, Ghana has not completely shut out foreign investment. It removed the 15% value added tax on exploration, ensuring that foreign investors still have incentives to enter. This signals a clear approach. Ghana is not rejecting foreign investment, but redefining it.

[00:12:56]Companies can invest, mine, and earn profits, but they can no longer take away all core profits and industrial capabilities. For the Chinese Communist Party, this is a direct challenge. Siz mining faces an especially difficult situation. It only took over the Aka mine in 2025 and is still in the integration phase. Yet, it is already confronting tightening regulations. Zim mining is now trying to find local contractors while making technical adjustments. This alone highlights a key reality. Owning assets does not mean controlling them. This has been one of the biggest miscalculations in the CCP's overseas strategy. It long assumed that with capital, technology, and acquisition capability, control over an industry would follow. But more and more resourcerich countries have come to a different conclusion. Foreign investment is welcome, but core interests must remain at home. The real beneficiaries of this round of policies are Ganaian companies. Firms such as Rockshore and Engineers Planners are taking on an increased share of core mining operations. In some cases, entire mines are being handed over to local operators. These companies are now capable of securing financing worth hundreds of millions of dollars while the technical and safety standards continue to improve. This shows that Ghana is not blindly reclaiming control.

[00:14:17]It is preparing local companies to take over. At the same time, a domestic mining services ecosystem is emerging, covering open pit mining, underground operations, and equipment maintenance.

[00:14:29]This means that once the policies are fully implemented, local firms will see significant gains in orders, financing capacity, and bargaining power. For Chinese invested enterprises, this shift comes at a high cost. Moving from self-operating mining to contract mining raises major challenges in safety, efficiency, and responsibility allocation. Who is responsible for equipment? Who bears a risk of output fluctuations? How should contractors be evaluated? What happens to existing employees? If not handled properly, these issues can directly affect production and costs. This is why some companies are seeking extensions. It is not simply a matter of switching contractors, but of rebuilding the entire operating system. Even so, the policy direction is already clear, and there's no turning back. For Chinese mining companies, this incident offers three very practical lessons. First, resourcerich countries now want more than taxes and equity. They want the entire industrial chain to stay local, including equipment procurement, profits from mining services, employment, and technical training. Second, competition is no longer about who gets the mine, but who can truly integrate locally. The real key is whether a company can build local cooperation networks and manage shareholder structures and regulatory relationships. Third, major projects cannot rely only on spending money.

[00:15:53]Companies must also build local capabilities in advance. If localization is only superficial, the cost will become extremely high once policies tighten. Therefore, Ghana's case is not isolated, but a sign of what is coming.

[00:16:07]For Zing mining, this is not only operational pressure, but a direct rejection of the CCP's entire overseas resource model. As resourcerich countries begin to reclaim control, Beijing's old playbook is gradually losing effect. Analysts say Chinese mining giants are being squeezed across three major continents at the same time, which is the final result of dramatic changes in the international situation since last year. Put simply, the Russia Ukraine war was a war that the Chinese Communist Party needed most. By contrast, this year's successive shifts in Venezuela and the Persian Gulf are exactly what Beijing least wanted to see because they touch its core interests.

[00:16:45]Meanwhile, resource powers such as Indonesia, Brazil, and Ghana have seen the Chinese Communist Party's weakness and the strong return of the United States. Against this backdrop, abandoning Beijing and embracing Washington has become a shared understanding. As a result, the industries the CCP spent years building overseas have naturally become sacrifices in the US China power struggle.