BHP's interest in Indonesia is driven by the country's rich nickel resources, especially following a ban on nickel exports that has attracted increased Chinese investment in processing capacity.

Discussions between BHP and Indonesian policymakers have been ongoing for several months, focusing on investment opportunities and the challenges facing the global nickel market.

The surge in Indonesian nickel supply has led to a decline in global nickel prices, prompting BHP to suspend its operations in Western Australia due to economic pressures.

BHP President Australia, Geraldine Slattery, cited global nickel oversupply as a significant economic challenge, resulting in the shutdown that affects approximately 2,500 jobs.

While the shutdown impacts 2,500 jobs, BHP has committed to offering alternative roles to frontline employees and establishing a $20 million community fund to support those affected.

For the financial year ending June 30, 2024, BHP anticipates an underlying loss of about $450 million in its nickel division.

BHP will suspend mining and processing at its Kwinana nickel refinery and Kalgoorlie nickel smelter until February 2027, with around 400 workers remaining to facilitate a potential restart.

BHP's interest in Indonesia aligns with the upcoming leadership of President-elect Prabowo Subianto, who will take office in October and may influence BHP's investment decisions.

Meidy Katrin Lengkey, secretary-general of the Indonesia Nickel Mining Association, believes that BHP's entry into Indonesia could enhance the country's nickel production and its value in the global market.

Global nickel prices have seen a significant drop, falling from over $25,000 per tonne to $16,725 in mid-July 2023, further complicating BHP's operational decisions.

In addition to the community fund, BHP plans to invest $450 million annually into its nickel division to enable a future restart of operations.

Nickel's critical role in electric vehicle batteries has prompted the Australian government to introduce supportive policies, further highlighting the mineral's importance in the current market.