Indonesia is "ready to fight" the European Union's challenge of the Southeast Asian country's ban on nickel ore exports at the World Trade Organization, arguing the bloc's actions may hinder Indonesia's development plans, the trade minister said.

Once the world's biggest exporter of nickel, Indonesia banned ore exports last year to incentivize foreign investors to help develop a full nickel supply chain in the country, starting from extraction, processing into metals and chemicals used in batteries, all the way to building electric vehicles.

"The Indonesian government is ready to fight for and make efforts to defend against the EU lawsuit," Indonesian trade minister Muhammad Lutfi said on Thursday. The EU launched its initial complaint in November, 2019, against the export restrictions on raw materials, notably nickel ore and iron ore, that are used to make stainless steel, saying the bans were illegal and unfair to EU steel producers.

It escalated its challenge at the WTO last month by requesting the Geneva-based trade body form a panel to adjudicate on the case.

The European Commission said last month the EU stainless steel industry was producing at its lowest level for 10 years, while Indonesia was set to become the second-largest global producer after China due to "unfair measures".

In 2019, the EU imposed duties on hot-rolled flat stainless steel from Indonesia and launched an investigation in September into cold-rolled stainless products from Indonesia.