New Developments in Indonesia's Nickel Quota Policy! Additional Quotas Will Be Distributed Specifically, And The Industry Has Proposed To Increase The Buffer Stock By 30 Million Tons Of Ore.

On August 14th, according to foreign media reports, the Indonesian Nickel Mining Association disclosed on Thursday that the Indonesian government plans to selectively approve additional nickel ore production quotas. The policy will only benefit smelters with tight raw material inventories. Currently, the market is still awaiting the official implementation of the details of this year's quota adjustment. The association's statement shows that the overall basic production quota for nickel ore in 2026 will remain at 260 - 270 million tons, a significant reduction compared to the 379 million tons in 2025. Data indicates that in the first seven months of this year, Indonesia's domestic nickel ore consumption reached 142.96 million tons, accounting for 53% to 55% of the annual quota. The association proposed to the government that an additional 30 million tons of nickel ore mining quota be added as a strategic buffer, raising the total annual quota to approximately 300 million tons to match the newly installed production capacity that will come online in 2026. It is reported that Indonesia currently has about 80 nickel smelting plants, and if all operate at full capacity, the annual demand for nickel ore could reach 315 million tons. There is currently a gap between the current quota and the demand for smelting capacity. The association also called on the government to increase the transparency of the quota-setting process. The association's secretary-general stated that the quota revision lacks standardized and transparent rules, which can easily trigger excessive market reactions to rumors of quota adjustments. The fluctuation of nickel prices on the London Metal Exchange (LME) in early August has confirmed this phenomenon. Regarding industry demands, the Indonesian Ministry of Energy and Mineral Resources has not responded to the size of the new quota yet. It only reaffirmed that the policy aims to balance resource sustainable development and stabilize nickel market prices. As the world's largest nickel supplier, the nickel quota policy of Indonesia directly affects global nickel raw material supply. Subsequent market focus will be on the approval results of the Indonesian government's quotas and the pace of the implementation of the additional quotas, as well as continuous observation of changes in raw material inventories and production start-ups of smelters. The policy trends will continue to disturb the operation of nickel prices.