Nickel Royalty Reforms Reflect Indonesia's Commitment to Resource Preservation

Nickel indonesia

Focus Keyphrase: Indonesia nickel royalty controls

Indonesia has reaffirmed its commitment to nickel royalty controls by increasing royalty rates and introducing new output restrictions. The changes aim to preserve Indonesia's nickel reserves and stabilize global prices.

Indonesia Tightens Control Over Nickel Output and Royalties

In March 2025, Indonesia adopted Regulation 19 to revise nickel royalty rates. The new structure raises ore royalties from 10% to 14–19%. It also introduces royalty rates of 5–7% for ferronickel and NPI and 3.5–5.5% for nickel matte. These changes, effective end of April, reflect a strategy to balance export earnings with long-term resource conservation.

According to Cecep Mochammad Yasin from the energy and mineral resources ministry, the adjustment aims to secure greater economic returns and reduce overexploitation. He stressed the need to protect nickel reserves for future generations, emphasizing the risks of rapid depletion.

Global Coordination and Downstream Development

Indonesia has cut its 2025 nickel production quota to 200mn t, down from 215mn t in 2024. This move follows a global oversupply that pushed LME nickel prices to a low of $14,000/t in early April. Prices later rebounded to $15,000/t amid ongoing trade talks.

Cecep hinted at possible collaboration with other nickel-producing nations to better manage global supply. Officials also warned of declining ore quality, which could challenge future production, particularly in nickel pig iron (NPI).

Meanwhile, Indonesia is accelerating its downstream strategy. Plans include boosting stainless steel, battery raw material, and EV component production. Under the Indonesia Emas 2045 roadmap, the country seeks to invest over $600bn in commodity-linked industries to escape the "middle-income trap."

The Metalnomist Commentary

Indonesia's nickel royalty reforms mark a major shift in global resource governance. By tightening output and encouraging downstream investments, Indonesia is moving from a raw exporter to a value-added production hub. These efforts could significantly influence global nickel pricing and supply chain dynamics.