Indonesia restricts new nickel smelters to cope with oversupply

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The Ministry of Energy and Mineral Resources (MEMR) has supported the Ministry of Industry's policy of restricting investment permits and Industrial Undertaking Licenses (IUI) for new nickel smelters, as there has been a global and domestic surplus in nickel supply.The ESDM minister said that nickel production targets and quotas will be adjusted in 2026, with output likely to fall below 300 million tons from 319 million tons in 2025.

New regulations of the Ministry of IndustryProhibition of new stand-alone smelters producing intermediate products (e.g., nickel matte, MHP, ferronickel, nickel pig iron)The requirement is to extend to downstream products (e.g., electrolytic nickel, nickel sulfate, nickel chloride). HoweverSmelters that have entered the construction phase can still produce intermediate products. There are currently 147 nickel smelting projects in Indonesia with a total ore demand of 735.2 million tons.

Approved for 2025RKAB quota of 364 million tons, up from 2023.ESDM data shows that nickel production is targeted at 220 million tons this year, down from last year's target of 240 million tons. Indonesia has44 operating smelters(mainly in North Maluku).19 projects under construction and 7 at the feasibility study stageThe

The Government emphasizes thatDownstreaming should go beyond secondary productsfig. change one's stanceyour (honorific)added-value product, in line with the National Industrial Plan 2025-2035.

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