Slash Production, Indonesia's Way to Boost Global Nickel Prices

Jakarta, CNBC Indonesia – The Indonesian government is seeking to boost nickel prices on the global market by cutting this year’s target for nickel ore production. The government will reduce ore production for the year to around 260 million tonnes, down about 31% from the 2025 Work Plan and Budget (RKAB) figure of 379 million tonnes.

Director General of Minerals and Coal (Dirjen Minerba) Tri Winarno of the Ministry of Energy and Mineral Resources (ESDM) said the policy is intended to tackle oversupply in the global market, which has been weighing on nickel prices. Tri explained that Indonesia accounts for 65% of global nickel production. He noted that the market condition was ironical because the country is a dominant producer but has little control over prices due to supply flooding to a surplus of around 250,000 tonnes of nickel (Ni).

“Now, therefore, we try to control. This is our product, but we can’t do anything? Oh, it turns out there was an oversupply of around 250,000 tonnes Ni. So we are trying to go in that direction,” Tri said during an interview at the Ministry of Energy and Mineral Resources’ office, quoted on Wednesday (4 March 2026).

So far, production controls are seen to be showing a positive trend in world nickel price movements. Tri noted that nickel prices, which had been stagnant, were beginning to rise after the government signalled to curb exploitation. “This price has been at US$14-15 thousand for years. It was announced by Mr Bahlil that prices rose. Nickel had actually risen from about US$14,800, now around US$17 thousand or so. It even touched around US$18 thousand at one point,” he added.

In addition, the policy is also based on considerations of the sustainability of Indonesia’s national nickel reserves, which remain around 5 billion tonnes. The government does not want Indonesia to continuously deplete natural resources when prices are low, and instead run out of stock when prices soar in the future, unlike other countries such as China which stores its stocks. “China does not mine nickel. And while later we will mine continuously, then when prices rise, there will be nothing. What natural resources could we rely on for our revenue,” he concluded.