Despite RKAB Restrictions, UT Continues US$113 Million RKEF Smelter Investment
PT United Tractors Tbk (UT) is continuing the construction of a nickel smelter based on rotary kiln electric furnace (RKEF) technology amid pressures from policies restricting work plans and budgets (RKAB), which could suppress production.
UT Director Vilihati Surya revealed that the company is currently allocating around US$113 million in investment for the construction of the nickel processing facility as part of the downstreaming strategy.
“For nickel, we are currently building an RKEF smelter with an investment value of around US$113 million,” Vilihati stated during a press conference in Jakarta on Thursday (16/4/2026).
This investment forms part of the company’s total capital expenditure (capex) budgeted at around US$850 million. However, she emphasised that the entire capex allocation is still under evaluation in line with government policy dynamics impacting mining production.
According to her, the RKAB restrictions for nickel and coal commodities in 2026 are forcing the company to make adjustments, both in operational targets and investment strategies.
“Due to the production decline from the RKAB restrictions, we need to review production again, and this will impact capital expenditure,” she explained.
This situation poses particular challenges for the RKEF smelter project, which requires a stable supply of nickel ore. On one hand, the development of downstream facilities is still being pushed to increase added value, but on the other, raw material supplies could be pressured by production policies.
The woman who joined the Astra Group in 2007 acknowledged that UT is currently conducting a comprehensive evaluation to maintain a balance between operational performance and investment sustainability.
“We are continuously monitoring this situation and making adjustments so that performance remains positive and in line with targets, including maintaining a balance between production and investment,” she said.
Besides the smelter project, most of UT’s capex is also allocated to the mining contractor business line through Pama Persada and the development of other mineral businesses.
The company hopes for revisions or adjustments to the RKAB from the government in the first half of this year so that production targets can be increased again and support the optimisation of ongoing downstream projects.
By continuing the RKEF smelter construction amid regulatory pressures, UT demonstrates its commitment to strengthening its position in the nickel industry value chain, despite challenges in supply and policy uncertainty.