Eramet Weda Bay Nickel Faces Care and Maintenance Risk as RKAB Quota Tightens

Eramet - Nickel

Eramet Weda Bay nickel operations face a potential care and maintenance move in May after Indonesia approved a sharply reduced 2026 nickel ore quota. The French mining group said PT Weda Bay Nickel received an initial RKAB permit covering only 12mn wet metric tonnes of nickel ore production and sales.

The Eramet Weda Bay nickel quota is more than 70% below last year’s authorised level. PT WBN initially received 32mn wmt in 2025, later revised up to 42mn wmt.

Eramet has requested an upward revision to the 2026 permit. The company said the current quota will be exhausted by the middle of next month, making the permit decision the most important near-term issue for its nickel business.

The initial 12mn wmt permit includes 3mn wmt for internal use. This leaves Eramet’s external sales target at only 9mn wmt for 2026, well below the level implied by the mine’s operating capacity.

Indonesia’s RKAB Limits Threaten Ore Supply and NPI Continuity

PT Weda Bay Nickel is preparing to enter care and maintenance if the quota is not increased. Eramet said its nickel pig iron plant will continue operating using ore stocks, but the mining restriction creates clear supply risk.

The permit issue matters because Weda Bay is a key ore supplier inside Indonesia’s nickel ecosystem. Its saprolite ore supports nickel pig iron and stainless steel production, while limonite ore feeds high-pressure acid leach plants producing battery intermediates.

PT WBN delivered strong first-quarter output before the quota risk escalated. Marketable nickel ore production rose by 10% on the year to 10mn wmt.

External ore sales climbed by 54% to 8.3mn wmt. Saprolite sales increased by 27% to 4.8mn wmt, while limonite sales jumped by 118% to 3.6mn wmt.

The limonite increase was driven by stronger demand from HPAL plants at the Indonesia Weda Bay Industrial Park. Internal ore consumption for Eramet’s NPI plant was 1mn wmt during the quarter.

Strong sales partly reflected a weak comparison with early 2025, when IWIP plants were destocking after ending 2024 with high inventories. Still, the result shows that downstream demand remains firm.

PT WBN also continued to benefit from premiums of more than 100% above Indonesia’s benchmark floor price for high-grade saprolite. This reflected tight domestic ore supply and stronger competition for available material.

Nickel Market Rebalancing Depends on Permits, Sulphur and Ore Costs

Eramet’s nickel ferro-alloy production was broadly stable in the first quarter. Output reached 9,000t of nickel, down only 1% from a year earlier.

Adjusted nickel turnover, excluding New Caledonia’s Societe Le Nickel, rose by 43% to €163mn. Eramet’s share of PT WBN turnover, excluding its offtake contract, increased by 59% to €116mn.

The company said first-quarter market conditions were supportive. The average London Metal Exchange nickel price rose by 12% on the year to $17,362/t, driven partly by uncertainty over Indonesian ore supply.

Global primary nickel demand rose by 3% to 900,000t in the first quarter. Stainless steel, batteries and aerospace supported consumption.

Global primary nickel production fell by 3%, although the market remained in a modest surplus. Eramet said the nickel market could gradually rebalance over the rest of the year.

Restricted Indonesian mine permits are one reason. Sulphur supply problems are another, because they are raising costs for HPAL producers that depend on sulphuric acid or sulphur feedstock.

PT WBN’s production costs are expected to rise from 2025 levels. Eramet cited authorised volume limits, mining plan adjustments and higher fuel prices.

Indonesia’s revised mineral benchmark formula could also reshape ore economics. The formula, effective from mid-April, now includes cobalt and other contained metals in ore valuation.

This change could increase costs for HPAL feedstock and alter the economics of limonite supply. It also strengthens the government’s ability to capture more value from contained metals in nickel ore.

For Eramet Weda Bay nickel operations, the quota decision will determine whether strong first-quarter performance can continue. Without a higher RKAB, the mine faces a sudden operating constraint despite firm downstream demand.

The Metalnomist Commentary

Eramet Weda Bay nickel is becoming a test case for Indonesia’s tighter control over ore supply. If the RKAB quota is not revised, the impact will reach beyond one mine and reinforce cost pressure across NPI, HPAL and battery-linked nickel supply chains.