Video: If Nickel Production Quota is Limited, Smelters are "Forced" to Import

Jakarta, CNBC Indonesia - The Ministry of Energy and Mineral Resources has cut nickel and coal production quotas in the 2026 Work Plan and Budget to maintain balance between supply and demand and preserve commodity price stability.

The nickel production quota in the 2026 Work Plan and Budget has been set at a range of 250-270 million tonnes, down from total 2025 production of 379 million tonnes, whilst coal production is set to fall to 600 million tonnes from 790 million tonnes in 2026.

The approximately 30% reduction in the 2026 nickel production quota is intended to drive up global nickel prices, which have been experiencing weakness, according to Muchtazar, Head of Sustainability at Nickel Industries Limited. However, the nickel price strengthening resulting from this policy is expected to be short-lived and is anticipated to be reviewed again to ensure industry sustainability.

Miners also hope that the government will pay attention to the impact on miners and smelter plants, which require stable nickel ore supplies to maintain performance as promised at the time of investment. There are concerns that this policy could disrupt nickel ore supplies, potentially leading to increased imports of nickel ore and suppressing the profitability of Indonesia’s nickel industry.