Nickel ore supply certainty key to downstreaming success: INDEF

The Institute for Development of Economics and Finance (INDEF) has stated that certainty of nickel ore supply is the key to ensuring the sustainability of downstream processing, allowing smelter operations to continue amidst increasing demand for raw materials in the processing industry. “The government’s step to relax nickel production quotas is considered an important correction to maintain the sustainability of the national downstreaming programme,” said Head of the Center of Industry, Trade and Investment at INDEF, Andry Satrio Nugroho, in Jakarta on Monday. According to him, the government, through the Directorate General of Mineral and Coal, stated that quota adjustments are only granted to companies that implement the principles of good corporate governance, good mining practice, and comply with all applicable provisions and policies. He noted that the quota relaxation is a consequence of the imbalance between efforts to maintain nickel prices and the need for raw material supply for downstream industries. He explained that the problem lies in quotas being held back to lift prices, while at the same time, ore supply must be increased so that smelters can continue operating. “These two objectives are difficult to achieve simultaneously solely through quota regulation,” he said. He explained that the demand for nickel ore to supply smelters in 2026 is estimated to reach 340 million to 360 million tonnes.