Government Assures Nickel Smelters Will Not Face Ore Supply Shortages

The Ministry of Energy and Mineral Resources has assured there will be no significant increase in nickel ore production within the Work Plan and Budget framework. The government will only allow production increases to meet the needs of processing and refining facilities currently experiencing ore supply shortages. Director General of Mineral and Coal, Tri Winarno, confirmed that whilst the potential for additional nickel quotas exists this year, any increase will not be substantial. The nickel production quota for 2026 remains capped at a range of 260-270 million tonnes per year. Tri emphasised that a balance must be struck between mining production capacity and the actual requirements of smelters. The allocation of production quotas in the revised plans is being conducted selectively to close the raw material gap for smelters still requiring supply. The quota adjustments cover both limonite and saprolite nickel ore types, depending on each company’s smelter specifications. Tri stressed that the government will not grant excessive volume increases to prevent a price collapse due to oversupply. Business entities still have the opportunity to submit revisions or request additional production quotas until 31 July 2026. All applications will be evaluated to ensure downstreaming objectives are optimally achieved. In accordance with Ministerial Regulation Number 17 of 2025, companies may propose changes after submitting periodic reports up to the second quarter, or by 31 July at the latest. However, submission of a revision does not guarantee approval. The government continues to balance the interests of the upstream and downstream sectors, ensuring miners have room to operate whilst providing adequate raw material for the processing industry to sustain downstream activities.