Government Assures Nickel Smelters Will Not Face Ore Supply Shortages
Jakarta, CNBC Indonesia – The Ministry of Energy and Mineral Resources (ESDM) has confirmed there will be no significant increase in nickel ore production within the Work Plan and Budget (RKAB). The government will only allow production increases to meet the needs of processing and refining facilities (smelters) that are currently experiencing a shortage of nickel ore supply.
Tri Winarno, Director General of Minerals and Coal at the Ministry of ESDM, assured that although the government is opening the possibility of additions to this year’s nickel RKAB, any increase will not be significant. According to him, the nickel RKAB for 2026 remains set in the range of 260–270 million tonnes per year.
“Let me make this clear — there will be no increase in nickel production, except to make up for supply shortfalls at smelters. That is all,” he said when met at the Ministry of ESDM office in Jakarta on Friday (10/7/2026).
Tri emphasised that there must be a balance between mining production capacity and the real needs of refining plants. He stressed that production quota allocations in the RKAB revision are being carried out selectively to close the raw material gap at smelters still in need of supply.
“We are still assessing what the smelters’ total requirements are, how much has already been approved in the RKAB, and then perhaps a small addition on top of that,” he asserted.
The quota adjustment covers both limonite and saprolite nickel ore, depending on the specifications of each company’s smelter. Tri underlined that the government will not grant excessively large volume increases in order to prevent prices from falling due to oversupply.
“The numbers are not yet clear, but the aim is only to catch up on shortfalls — we must not allow an oversupply. That is it,” he added.
He noted that business players still have the opportunity to submit revisions or additions to their production quotas until 31 July 2026. All requests will be evaluated to ensure the downstreaming objective continues to be achieved optimally.
“If they want to submit, the deadline is 31 July at the latest, but whether it is approved, and by how much, will depend on the evaluation,” he stated.
Under Ministerial Regulation ESDM Number 17 of 2025, business entities may submit RKAB changes after delivering periodic reports up to the second quarter, or by 31 July of the current year at the latest. However, submission of an RKAB change does not mean automatic approval.
The government continues to strive to maintain a balance between upstream and downstream interests. Miners need room to keep operating and carrying out their investments, while the processing and refining industry requires an adequate supply of raw materials so that downstreaming activities can continue.
At the same time, the government also needs to ensure production does not grow excessively. Production that is too high risks suppressing commodity prices, accelerating the depletion of reserves, and reducing the effectiveness of national mining governance.