Experts agree that Indonesia's president-electPrabowo Subiantowill continue to build up the nation's vertically integrated nickel industry.

What is less certain is how he will balance the nation's relationship with China—currently the biggest foreign investor in the country's nickel industry—with ambitions to attract Western investors who will be more concerned about the sector's toll on the environment and local communities.

"The Indonesian government appears divided," saidAhmad Syarif, a doctoral candidate in international affairs at Johns Hopkins University and an expert in Indonesian energy and natural resources issues.

"One faction advocates...