From ore to order: can resource nationalism fuel real development?

Mineral-rich countries are revisiting an old idea with a new sense of new urgency: that of keeping more value at home. Instead of shipping out raw ore and riding the boom-bust of commodity prices, governments are tightening export rules and courting investors to build smelters, refineries, and battery-component plants at home.

The pitch is simple: modify the political calculus by capturing jobs and bargaining power, moving up the ladder from extraction to processing. Fine in theory, tougher in practice. And, as the global demand for critical minerals rises inexorably in tandem with the ever-increasing proliferation of the technologies that require them, for everything from nickel and copper to lithium, states face a narrow path between leverage and overreach, investment and dependency, speed and sustainability.

Here, we will take a look at three routes on the same road: Indonesia’s hard-edged bans to force downstream investment, Chile’s negotiated, state-led push for value-add, and the Philippines’ caution after a flirting moment with bans it wasn’t ready to backstop. Together, they show what works, what breaks, and what kind of cooperation might still be needed to avoid a zero-sum scramble.

Indonesia: leverage first, fix later

The headline case because it has something few others do: scale and leverage. Vast laterite deposits (used in construction materials) and a dominant share of global nickel resources mean that Jakarta could credibly bet that buyers would follow the ore, and it has been using that leverage bluntly. A partial raw-ore export ban in 2014 tightened by 2017, then culminated in a full nickel-ore ban in 2020, coupled with tacit requirements to refine domestically. The message to miners and the metals sector was unambiguous: build your smelters in Indonesia or lose access to the ore altogether. A WTO dispute brought by the European Union then challenged these measures, and a panel found them inconsistent with trade rules in 2022, something that Indonesia appealed, and Jakarta has simply continued “downstreaming” regardless. (WTO).

If we consider the immediate metrics, the strategy worked. Foreign capital surged into industrial parks across Sulawesi and elsewhere, smelters multiplied, and exports shifted from raw ore to higher-value nickel pig iron, matte, and other refined forms. Independent analyses track a marked shift toward processed products, rising downstream output, and increased foreign investment following the ban. Politically, the wins bred ambition: restrictions were extended to bauxite and signaled for other minerals, and the “downstreaming” frame became a national development story. (UNU).

However, the picture isn’t as simple as it looks: costs and dependencies are real.

First, ownership and technology remain concentrated in foreign hands, and it’s mainly the Chinese firms that once bought Indonesia’s ore who now control much of its processing. They bring capital and expertise, sure, but profits flow back to China and local value capture stays limited. Second, the environmental toll is steep. Coal-powered smelters, deforestation, and weak oversight are creating health and ecological risks that could wipe out economic gains unless production shifts to cleaner energy, something that energy-transition analysts have long urged. Third, legal and diplomatic friction add uncertainty. The EU has weighed implementing countermeasures, and Indonesia’s appeal has stalled the case, showing how trade disputes now shape the industrial landscape, or slow down activity.

There are also practical limits to how far export bans can reshape supply chains. For example, when local ore runs short or permits lag, the smelters import from the Philippines to stay operational, resilient proof that global flows quickly adjust to impediments and coordination among producers still matters.

Still, Indonesia’s experience carries a clear lesson: when the state can align policy, power, and infrastructure around its resources, export bans can jump-start industrialization. The challenge now is moving from “any smelter, fast” to “cleaner, smarter, and more locally owned,” so that downstreaming becomes a true development path, not just a processing zone.

Chile: negotiated control, slower build

Chile is chasing the same goal, but by different means. A copper giant and leading lithium producer, it has long exported mostly raw material such as copper concentrate and lithium brine, with limited local processing. However, after social unrest in 2019, public demand for fairer returns, community input, and stronger environmental rules began to reshape policy. The new approach seeks to expand state ownership, boost public revenue, and use incentives to keep more value within the country.

Rather than bans, Santiago is building majority public stakes in key lithium projects, linking approvals to local processing, and offering cheaper feedstock (the raw stuff used as inputs in the industrial process) to firms investing in battery-grade or cathode production within Chile. For copper, the policy favors more domestic refining and stricter, visible environmental standards. The goal is to steer investment, not nationalize it, by using public participation to de-risk projects, set sustainability rules, and share the resulting profits with citizens. (National Lithium Strategy - Gobierno de Chile).

Again, this sounds great in theory, but progress, of course, depends on timing and scale. When lithium prices go down and some projects are delayed or canceled, building that enhanced midstream capacity without a domestic EV industry is tough. Still, the path Chile has negotiated comes with advantages: it’s more stable through price swings, public stakes can fund infrastructure and R&D, and the inherent structure of community inclusion helps prevent the social backlash that often results without it. The real test now is speed, essentially whether Chile can turn its careful planning into real projects fast enough to stay competitive as global supply chains reconfigure, then lock in.

The Philippines: second-mover constraints

Here we can see the limits of leverage. When Indonesia turned off the ore supply, Philippine nickel shipments surged to fill the vacuum and feed Chinese smelters and, ironically at times, even Indonesian refineries short on local feedstock. That window of surging economic activity tempted policymakers to copy the playbook, banning unprocessed ore exports by a set date, forcing capital into local smelting ventures, and seeking to capture and retain value domestically.

Plans shifted, the rhetoric toughened… then the brakes hit hard. In June 2025, lawmakers dropped the export-ban proposal from a wider mining reform after industry warned of power shortages, too few serious investors, and limits on how many smelters the country could realistically build. Business groups welcomed the reversal, saying it protected jobs and investor confidence while recognizing the real barriers to local processing. (InsiderPH).

This pushback against the seductive idea of what would likely be unchecked expansion turned out to be a pragmatic move. Unlike Indonesia, the Philippines cannot count on buyers accepting any terms as the nation doesn’t hold the same global nickel leverage. Patchy infrastructure, permit hurdles, and smaller ore deposits, even a sudden ban could cut off revenue without delivering new industry. For now, ore exports still keep people employed and money flowing. Over time, a slower push toward a few well-powered, cleaner plants may bring more lasting gains, and a more sustainable economic plan for the sector, than an all-at-once ban that collapses under its own weight.

What this wave is, and is not

Across these cases, three truths are evident:

First, leverage sets the ceiling. Export bans are not magic wands, they are a bargaining chip that works only when buyers cannot easily pivot elsewhere. Indonesia wielded that chip because of its resource share and geographic fit with existing Chinese industrial ecosystems. Chile wields a different chip, one of institutional credibility and the ability to de-risk projects, so it can attract longer-term partners. The Philippines, on the other hand, has to build its leverage through infrastructure and reliability before it can start to demand more.

Second, ownership and capability matter more than tonnage. A surge in refined output is not the same as a surge in domestic know-how. We see the development success stories when local firms step up and climb the capability curve, from engineering, procurement, and construction (EPC) partners to operators to designers; when profit streams are shared through taxes, royalties, and public equity; and when skills programs funnel local talent into operations, lab work, and process engineering. The stories go wrong when countries host foreign-controlled islands of processing with minimal local involvement. Indonesia’s push to diversify investors beyond dominant Chinese ownership is one sign of this awareness.

Third, the environment can’t be an afterthought. Coal-fired smelting that scars forests and chokes air buys immediate growth spikes at the expense of long, drawn-out public health and legitimacy issues later. The winning model is putting cleaner power into industry; strict water and waste rules underpinned by robust enforcement; early, transparent community-benefit agreements; and an acceptance that some deposits should simply stay unmined. If “beneficiation”, the mining term for taking raw ore and adding value to it through the processing chain, becomes a synonym for sacrifice zone, then the backlash will threaten not only individual projects, but will poison the politics of upgrading for a generation.

The global response

Importing countries and major powers aren’t standing still. On one front, the EU has challenged Indonesia’s export bans at the WTO, showing that buyers will make use of international legal mechanisms to fight restrictive trade moves. On another note, the U.S., Japan, and their partners are pushing to build diversified, “trusted” supply chains that are less reliant on China, funding new refining and midstream projects in the Global South, but often with rules that conflict with Chinese-backed ventures. This competitive reaction already has ramifications, influencing how projects are financed in Indonesia, who Chile partners with, and which investors the Philippines attracts.

At the same time, the industry, the economics of it all, adapt: ore flows to where smelters have demand, smelters move where power is cheapest, and battery makers tweak chemistries to fit changing costs, policies, and materials availability.

This all underlines why cooperation matters. A G20 minerals dialogue focused only on access totally misses the point, while the real work is practical: sharing data on supply and processing, forming technology and training partnerships, financing cleaner production, and creating fair mechanisms to settle disputes. On the end-demand side, if wealthier nations help fund clean energy and processing at the source, and producers commit to strong environmental and governance standards, everyone gains a more stable, resilient system, and not just a new round of tit-for-tat resource antics. Even Indonesia’s occasional need to import ore shows how interconnected the system already is.

The real test is execution

Resource nationalism is a tool, not a development model. Bans, mandates, and government involvement can open doors, for sure, but what follows depends on how well they’re used.

Indonesia proved that tough rules can trigger an industrial surge. Now it needs to deepen skills, share ownership, and clean up its energy mix to derive longer-term benefit from that surge. Chile is betting on steady reforms and public participation to turn its geology into lasting value without scaring off investors. Now, it must turn policies into a buoyant sector that can survive the next price slump. The Philippines still has a window of opportunity, to move slower and build better, but it must do so by fixing power, permits, and skills so its first projects succeed and set a standard for durable growth.

Done right, “from ore to order” isn’t a slogan; it’s a chain of hard choices: what to mine and what to leave in the earth, who to partner with, how to share gains and measure the damage from such an industrially intense, invasive sector. The real reward isn’t the glitter of short-term export revenue, but the more polished foundations of resilience: skilled workers, reliable suppliers, environmental credibility, and the ability to set fair terms with others because you’re confident you can deliver at home.

The alternative, of course, is the old pattern: new smokestacks, same dependency. Not just a question of “what we want”, but what we can no longer afford to do.

Read this. Notice that. Do something.

Read this: The WTO’s case file on the EU–Indonesia nickel dispute shows how trade rules are testing resource policy. Chile’s National Lithium Strategy lays out what a negotiated path to value-add looks like. And in the Philippines, InsiderPH’s look at lawmakers dropping the ore-export ban captures why timing still trumps rhetoric.

Notice that: Leverage, not slogans, decides outcomes: Indonesia’s bans worked because buyers couldn’t pivot; Chile trades speed for durability through state participation; the Philippines is working on infrastructure before mandates. Clean-power sourcing will determine whether “value-add” survives the next price cycle.

Do something: Pay attention to where the next “green” boom is really powered. If factories run on coal or communities aren’t consulted, the gains aren’t sustainable. Demand transparency about energy sources, local benefits, and who actually owns the value chain.

Previously on GYST: The long game of small states: middle powers as the new rule-writers

Next up: The cost of living with risk: how climate change is rewriting the price of protection