The Indonesian Nickel Miners Association (APNI) has recorded that\ninvestment in nickel downstream processing reached Rp71 trillion in the\nfirst half of 2026, comprising Rp41.5 trillion in the first quarter and\nRp29.4 trillion in the second quarter. This makes nickel the mineral\ncommodity with the largest cumulative investment value, signalling\nstrong investor appetite for the national downstream agenda.<\/p>\n
However, APNI Secretary General Meidy Katrin Lengkey stated that the\nindustry is now at a crucial juncture, facing uncertainty over the\nsupply of raw materials. The government has indicated that the general\nWork Plan and Budget (RKAB) quota for nickel ore in 2026 will not be\nincreased from the range of 260 million to 270 million tonnes, a sharp\ndecline from the realised production of 379 million tonnes in 2025. The\ngovernment is only open to selective quota revisions for smelters\nexperiencing raw material shortages.<\/p>\n
Domestic nickel ore consumption from January to July 2026 has already\nreached 142.96 million tonnes, or approximately 53 to 55 percent of the\ntotal quota. APNI assesses that this consumption rate is higher than the\npro-rata calculation, meaning industry needs could approach or even\nexceed the lower limit of the quota before the year ends.<\/p>\n
This uncertainty is beginning to influence investor behaviour. For\nthe first time, investment in bauxite reached Rp40.1 trillion in the\nsecond quarter of 2026, surpassing nickel investment for that period.\nAPNI views this as a signal that some investors are adopting a\nwait-and-see approach amid the unclear quota revision process.\nNevertheless, cumulative nickel investment for the first half remains\nthe largest.<\/p>\n
The substantial investment has been accompanied by an expansion in\nprocessing capacity. The national smelter base now comprises 80\nfacilities, including 55 rotary kiln electric furnaces, 11 high-pressure\nacid leach plants, eight nickel matte facilities, and six integrated\nstainless steel plants. APNI estimates that if all smelters operate at\nfull capacity, the annual ore requirement could reach approximately 315\nmillion tonnes, far exceeding the current RKAB quota range.<\/p>\n
To address this, APNI proposes that the government formalise the 2026\nRKAB quota at 270 million tonnes and provide a strategic buffer of 30\nmillion tonnes to meet actual smelter needs. The association also\nhighlights the pressure from rising costs of supporting materials,\nparticularly sulphur used in mixed hydroxide precipitate production via\nHPAL. The average import price of sulphur reportedly surged from US$104\nper tonne in the first quarter of 2024 to US$817 per tonne in the second\nquarter of 2026, briefly exceeding US$1,100 per tonne in June 2026. With\naround 80 percent of sulphur supply dependent on the Middle East, this\nprice spike has driven up HPAL operational costs by more than 30\npercent.<\/p>\n
Looking at long-term sustainability, APNI notes that Indonesia holds\napproximately 5.31 billion tonnes of nickel ore reserves with a metal\ncontent of 52.47 million tonnes, but the reserve-to-resource ratio is\nonly about 30.5 percent. At current extraction rates, the lifespan of\nsaprolite ore, the primary feedstock for RKEF smelters, is estimated at\nonly nine to 15 years, whereas limonite reserves have a much longer\noutlook.<\/p>\n
APNI is calling for a comprehensive long-term strategy to maintain\nthe competitiveness of Indonesia\u2019s nickel industry, which now controls\naround 60 percent of global supply. The association notes that the\nrealised export price of Indonesian nickel has risen to approximately 89\npercent of the London Metal Exchange reference price, up from 79 percent\na year earlier. APNI believes this positions Indonesia to transform from\na price taker to a price influencer, provided supply discipline, ESG\nstandards, and governance of supporting raw materials are consistently\nmaintained. The association is urging the government to establish a\ntransparent, rules-based framework for RKAB revisions, maintain the\nmoratorium on new class-two RKEF smelters, prioritise HPAL investments\nwith dry-stacking tailings technology, and develop a National Nickel\nResource Strategy 2045 with exploration incentives to improve the\nreserve-to-resource ratio.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/nickel-downstream-investment-hits-rp71-trillion-apni-highlights-supply-certainty-concerns-1786672221", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }