From Glencore trader to Indonesia’s nickel king

JAKARTA: He’s the biggest trader in the world’s top producer of nickel, a metal that’s powering the shift to batteries and electric cars.

His firms handle billions of dollars worth of ore and own stakes in mines covering an area around the size of New York City.

Yet, even in the metals industry, few know the name Arif Kurniawan.

Indonesia’s nickel sector has seen a dramatic rise in recent years, as technological innovation turned vast, low-grade deposits into mining dominance and industrial clout. Kurniawan’s fortunes have tracked that ascent.

In under a decade, he has gone from earning paychecks at Glencore Plc to controlling approximately a third of his country’s domestic trade in nickel ore.

“Indonesia has been a complete disruptor of the nickel market over the last 10 years,” said Angela Durrant, principal analyst of base metals at consultancy CRU Group based in Sydney. “These local guys are the power brokers.”

Much has been written about the Chinese tycoons who poured billions into processing nickel in the South-East Asian nation, flipping the global market and wrongfooting rivals.

Less has been said about the Indonesians who control the mines that are the ultimate source of the metal, and about the influence they wield.

This first account of Kurniawan’s rise is based on interviews with more than 19 miners, traders and smelters familiar with his operations, who did business with or worked alongside him, as well as dozens of filings from Indonesia’s company registry.

Most of the people asked not to be identified so they could discuss private matters.

When contacted through two business associates, Kurniawan declined to comment for this story.

The route to prominence and wealth in Indonesia often passes through a family business.

Kurniawan’s solo rise speaks instead to his alliances, skills and the speed of the country’s industrial transformation over the last decade.

It also underscores the precarious nature of the achievement, as President Prabowo Subianto shakes up the mining industry and ignites a new battle for control of the country’s resources.

Kurniawan and his main business partner, Edi Liu Amas, between them have stakes in at least 20 mining concessions across the country’s major nickel centers, according to a Bloomberg analysis of corporate filings.

These span more than 71,000 ha (175,000 acres), an area roughly as large as New York City and far bigger than Weda Bay Nickel, the world’s largest mine in eastern Indonesia.

There’s no recent public data on Indonesia’s nickel ore trade, but according to the average estimate of a dozen fellow traders, miners and smelters, Kurniawan traded about a third of the ore market last year, excluding a small amount of supply consumed by integrated conglomerates.

Based on last year’s production of 220 million tonnes, according to figures cited by Macquarie Group, and current government benchmark prices, a rough estimate would put his annual volumes at around US$3bil.

This is a remarkable slice of the flows that underpin Indonesia’s nearly 70% of global nickel production, a level of control that has made the country critical for the world’s battery industry – all at a time when China is using its own stranglehold on parts of the wider supply chain to fight back against punitive tariffs.

A slight man who is believed to be in his 40s, Kurniawan is part of Indonesia’s ethnic Chinese minority, a community long prominent in local commerce and particularly associated with powerful conglomerates during Suharto’s New Order era.

Other than that, little is known about his background.

The trader keeps a low public profile and avoids social media. He dresses casually and eschews displays of wealth, maintaining the unassuming manner of his early days, according to people who know him – only the cluster of mobile phones next to him during meetings hints at his clout.

In the early 2000s, he was working at Glencore’s office in Jakarta, initially in the much larger coal division before transferring to the commodity giant’s nickel business, according to the three former colleagues who asked to remain anonymous discussing private information about his past.

Glencore sold its mining stake in 2013 as Indonesia prepared to introduce the ban. Shortly after, Kurniawan left the company to start a quarrying business.

The new venture didn’t work out, so he rejoined Glencore, according to two of his former colleagues.

When he returned, Kurniawan wanted to expand Glencore’s ore trading business in the country, but the firm was reluctant to deal with the small miners who even now account for about half of production, according to a person familiar with the company who asked not to be identified as the discussions were private.

Many nickel producers in Indonesia have opaque ownership, unreliable accounts and poor records of their mineral resources, which presented an unacceptable level of risk for the Switzerland-based trader, Kurniawan’s three former colleagues said. Glencore declined to comment.

Kurniawan set off alone once again, the three people said. His flagship PT Dua Delapan Resources – meaning 28 Resources in Indonesian, a nod to nickel’s atomic number – had been founded in 2015, according to a filing from Indonesia’s Ministry of Law.

His trading unit was founded in 2018, according to another filing. Some of his former colleagues joined the new company, the people said.

The timing could hardly have been better for the man who became “Mr 28.” The government, which had eased ore export restrictions that year, was flagging plans to ban exports again, and the Chinese firms were rapidly building smelters.

Kurniawan, who speaks Mandarin, Indonesian and English according to multiple people who have met him, became a crucial intermediary between the Chinese businesses and the patchwork of small mines dotted across the nation of more than 17,000 islands.

Mirroring Glencore’s approach, Kurniawan constantly reinvested his profits in the supply chain to gain influence, buying a portfolio of mines whose production he could trade.

He snapped up many of them before 2021, when nickel prices were low, according to corporate filings and three people familiar with the matter.

“The country is transitioning from being a marginal cost-setter to being a deliberate price floor architect,” Industrial & Commercial Bank of China Ltd analyst Dongchen Zhao wrote in a note this month.

Kurniawan has built strong relationships over years, even without the name recognition of other tycoons.

Maintaining his grip on the ore trade, though, will require the forging of new political alliances, according to people familiar with the matter, at a time when favour has rarely been more valuable – or more contested. — Bloomberg