Government rules out major increase in nickel ore production

The Ministry of Energy and Mineral Resources (ESDM) said it will not significantly increase nickel ore production under the revised 2026 Work Plan and Budget (RKAB), with any additional output limited to meeting shortages at domestic nickel processing and refining facilities.

Tri Winarno, Director General of Minerals and Coal at the ministry, said the government is open to revising this year's RKAB but any increase would be modest. Indonesia's approved nickel production quota for 2026 remains around 260-270 million tonnes.

"I want to make this clear: there will be no increase in nickel production except to meet the needs of smelters that are still short of ore supply. That's all," Tri told reporters at the ministry's office in Jakarta on Friday.

The government is assessing the total ore requirements of smelters against production volumes already approved under the RKAB before deciding whether additional quotas are necessary.

"We're still calculating the smelters' total requirements, comparing them with the RKAB volumes that have already been approved, and then there may be only a slight increase," he said.

The potential quota adjustment covers both limonite and saprolite ore, depending on the feedstock requirements of individual smelters. Tri said the government would avoid approving large production increases to prevent oversupply from depressing nickel prices.

"The figures are not final yet, but the intention is simply to address those shortages. We certainly do not want to hold back supply, but at the same time we must avoid oversupply. That's the key point," he said.

Mining companies have until July 31 to apply for revisions or additional production quotas. The ministry said all applications will be evaluated based on smelter requirements and the government's downstream processing objectives.

"Applications can be submitted until July 31 at the latest. As for the volume requested and whether it will be approved, that will depend on the evaluation," Tri said.

Under ESDM Ministerial Regulation No. 17/2025, companies may apply to amend their RKAB after submitting their second-quarter operational reports, but approval is not automatic.

The government said its policy aims to ensure sufficient ore supplies for domestic smelters while avoiding excessive production that could weaken prices, accelerate resource depletion and undermine the country's long-term mining governance.

Editing by Reiner Simanjuntak