GNI Debt Restructuring Exposes Pressure on Indonesia’s Nickel Smelting Model

Gunbuster Nickel Industry

GNI debt restructuring has placed one of Indonesia’s large nickel pig iron producers under court-supervised protection as ore shortages, rising costs and weak market conditions pressure the country’s smelting sector. Gunbuster Nickel Industry will continue operating while negotiating revised debt terms with creditors.

GNI debt restructuring follows a Central Jakarta Commercial Court decision placing the company under Indonesia’s suspension of debt payment obligations framework, known as PKPU. The process temporarily protects GNI from creditor enforcement while it prepares a restructuring proposal.

GNI debt restructuring is strategically important because the company operates 1.8mn t/yr of NPI capacity in North Morowali, Sulawesi. The plant represents a major part of the Chinese-backed RKEF expansion that transformed Indonesia into the world’s dominant nickel producer.

The case also follows financial distress at Huadi Nickel Alloy Indonesia, suggesting that pressure is spreading across parts of Indonesia’s NPI industry rather than remaining confined to a single producer.

Ore Shortages and Higher Costs Squeeze RKEF Producers

GNI operates 25 rotary kiln electric furnace production lines and began production in 2021 following investment of around Yn11bn. The scale of the complex makes its financial difficulties a significant signal for Indonesia’s nickel market.

The immediate problem is feedstock. Market participants have cited difficulty securing enough nickel ore as one factor behind recent production cuts at GNI.

Indonesia’s ore market has tightened as mining quotas, lower effective production and revised pricing rules increase costs for smelters. RKEF facilities depend on a continuous flow of suitable laterite ore, so shortages quickly reduce utilisation and raise unit costs.

Payment delays have added further pressure at GNI. Lower output can weaken cash flow while fixed costs, debt service and operating expenses remain high.

Huadi has faced similar problems. The company halted operations and entered its own debt suspension process after struggling with ore availability, higher feedstock costs and weak market conditions.

These cases show that Indonesia’s large nickel resource base does not automatically guarantee low-cost smelter economics. Ore access, pricing rules, power costs and financing are becoming more important differentiators between producers.

Indonesia’s Nickel Expansion Faces a Profitability Test

Indonesia’s nickel growth model was built on rapid investment in RKEF smelters producing NPI for stainless steel. That expansion created massive new supply, but it also compressed margins across the industry.

Oversupply remains an important problem. Weak nickel pricing makes it harder for higher-cost smelters to absorb rising ore and operating expenses.

Policy uncertainty adds another layer. Changes to mining quotas, ore pricing formulas and downstream regulations make long-term production planning more difficult.

Pressure is also visible beyond NPI. Nickel Industries’ ENC HPAL project and Hanrui’s nickel matte project have faced delays, showing that execution challenges are affecting both stainless-linked and battery-linked nickel routes.

This creates a more selective investment environment. Producers with captive mines, stronger balance sheets and integrated downstream assets are likely to be better positioned than standalone smelters dependent on external ore.

For the global nickel market, financial stress among Indonesian producers could eventually become supply discipline. If distressed plants cut output or remain underutilised, some of the oversupply that pressured nickel prices could begin to unwind.

The Metalnomist Commentary

GNI’s restructuring shows that Indonesia’s nickel dominance is entering a profitability test. The next phase will favour integrated producers with secure ore and strong balance sheets rather than smelters built only for rapid capacity growth.

Antam Nickel Ore Output Surges as Indonesia’s Domestic Demand Drives Growth

Antam Nickel

Antam nickel ore output surged in 2025 to its highest level in more than a decade. The state-controlled miner produced 16.1mn wet metric tonnes of nickel ore. That was up 62pc from the previous year. As a result, Antam nickel ore output now reflects the strength of Indonesian domestic nickel demand.

The company’s sales performance was even stronger. Nickel ore sales rose 75pc year on year to 14.6mn wet metric tonnes. This shows that domestic downstream buyers absorbed much of the additional supply. Therefore, Indonesia nickel ore production continues to benefit from the country’s internal processing expansion.

This matters because Antam’s ore supports more than one value chain. Its nickel ore feeds domestic class two nickel production and the company’s own ferronickel operations at Kolaka. Consequently, Antam nickel ore output remains important to both external downstream users and its internal processing strategy.

Indonesian Domestic Nickel Demand Is Reshaping Antam’s Business Mix

Indonesian domestic nickel demand is clearly driving Antam’s ore growth. The company’s production surge shows how strongly local processors continue to pull feedstock into the domestic market. This supports Indonesia’s long-term policy of deeper downstream integration. As a result, ore production is becoming more strategically valuable than before.

However, Antam’s ferronickel business moved in the opposite direction. Ferronickel output fell 20pc to 16,064t in nickel metal equivalent. Sales almost halved to 10,528t in nickel over the same period. Therefore, Antam is seeing a widening gap between ore strength and ferronickel weakness.

The company said rule changes in minimum sales pricing largely caused that decline. That means the problem was not simply demand destruction. Instead, market rules affected the economics of ferronickel sales more directly. Meanwhile, all ferronickel sales were exported, mainly to South Korea, India, and China.

Antam Battery Ecosystem Project Adds a New Strategic Layer

The Antam battery ecosystem project gives the company a stronger long-term growth story. Its joint venture with CATL began construction in the fourth quarter of 2025. That project aligns with Indonesia’s ambition to build a full downstream EV battery chain. Consequently, Antam is linking ore production more directly to higher-value battery materials.

This development matters because it expands Antam’s role beyond mining and traditional nickel products. The company is now tied more closely to Indonesia’s battery industrialization strategy. That could improve its strategic relevance even if ferronickel remains under pressure. Therefore, the Antam battery ecosystem project may become more important than short-term alloy sales.

The broader message is clear. Antam nickel ore output is rising because Indonesia’s downstream nickel model still demands more feedstock. At the same time, product mix and pricing rules are shifting value across the chain. As a result, Antam’s future may depend more on ore and battery exposure than on ferronickel alone.

The Metalnomist Commentary

Antam’s results show how Indonesia’s nickel strategy is rewarding upstream ore suppliers tied to domestic processing. The weakness in ferronickel also shows that not every downstream segment benefits equally. If the battery ecosystem expands as planned, Antam could become even more central to Indonesia’s next nickel phase.

Indonesia NPI Export Exemption Eases Nickel Trade Fears but Leaves Policy Risk

Nickel pig iron

Indonesia NPI export exemption has eased immediate concerns in the nickel market after sources said nickel pig iron will not need to be exported through Danantara Sumberdaya Indonesia. The clarification reduces near-term disruption risk for Indonesia’s dominant nickel alloy product.

Indonesia NPI export exemption matters because more than 90% of Indonesia’s nickel-alloy output is nickel pig iron. NPI is mainly used in stainless steel production and forms the backbone of Indonesia’s nickel downstreaming model.

Indonesia NPI export exemption does not remove all uncertainty. Ferro-nickel exports are still expected to be traded through DSI, while the industry lacks an official definition that clearly separates ferro-nickel from NPI.

That ambiguity is important because ferro-nickel and NPI share the same HS code under global and Indonesian trade frameworks. Market participants usually distinguish them by nickel content, with ferro-nickel typically above 20% nickel and NPI usually around 10-14%.

NPI Exclusion Protects Indonesia’s Core Nickel Flow

The exclusion of NPI from the DSI export requirement is commercially significant. NPI is Indonesia’s largest nickel product by volume and a critical feedstock for stainless steelmakers.

If NPI had been included, the rule could have disrupted contracts, pricing, payment flows and export execution across a major share of Indonesia’s nickel industry. That risk has now been reduced, at least for the near term.

The clarification also helps Chinese and regional stainless steel buyers. These customers rely heavily on Indonesian NPI because it offers a cost-effective alternative to pure nickel metal in stainless production.

However, the inclusion of ferro-nickel still matters. A small number of Indonesian smelters produce higher-nickel ferro-nickel, and those exports may now face a more centralised transaction structure through DSI.

The policy could therefore split Indonesia’s nickel alloy market into two regulatory paths. NPI would remain outside the new state export channel, while ferro-nickel would fall under tighter government control.

The risk is classification. Without a formal technical definition, exporters may face uncertainty over which products qualify as NPI and which are treated as ferro-nickel.

Policy Clarity Still Matters for Investment

Indonesia announced on 20 May that exports of key commodities, initially including palm oil, coal and ferro-alloys, must be routed through DSI. The aim is to centralise control over strategic commodity exports.

The nickel industry welcomed the NPI clarification, but investors remain cautious. Indonesia’s mining and metals policy has changed frequently, creating uncertainty around timing, scope and implementation.

This matters because downstream nickel projects require large capital commitments. Smelters, matte converters, HPAL plants and battery-material facilities all need stable rules before investors can justify long payback periods.

The DSI rule follows other policy shifts, including changes to ore pricing, royalty plans, export levies and RKAB approval processes. Even when policies support state revenue and downstreaming, sudden changes can raise financing risk.

Indonesia still holds enormous leverage in global nickel. Its dominance in NPI and stainless-linked supply gives Jakarta significant influence over trade flows and pricing.

But policy predictability is now becoming just as important as resource control. If rules change too quickly or remain unclear, investors may delay decisions even when Indonesia remains the strongest nickel platform.

The NPI exemption is therefore a useful correction. But the market still needs formal definitions, clear transaction rules and stable implementation before confidence fully returns.

The Metalnomist Commentary

Indonesia has reduced immediate nickel disruption by excluding NPI from the DSI export channel. But the ferro-nickel ambiguity shows that policy risk remains embedded in the country’s downstreaming model.

Antam 1H nickel ore output doubles as Indonesia’s MHP demand surges

Antam

Antam 1H nickel ore output doubles on strong low-grade ore demand from Indonesia’s MHP plants. The miner produced 9.1mn wmt in six months. Domestic processors prioritized low-grade feed for mixed hydroxide precipitate production. Antam 1H nickel ore output doubles as processors secure supply amid rapid battery growth.

MHP growth reshapes Indonesia’s nickel feedstock flows

Indonesia’s MHP expansion is driving structural ore demand. Second-quarter output reached 4.47mn wmt, up 63pc year on year. Most volumes supplied domestic MHP producers that favor low-grade ore. As a result, ore flows shifted from export-oriented routes to HPAL-linked hubs. Forecast MHP output could hit 480,000t Ni-equivalent in 2025. Therefore, Indonesia’s battery precursor pipeline keeps tightening ore balances.

Ferronickel softens while export channels stay active

Ferronickel output fell 11pc to 9,067t Ni-equivalent in the half. Second-quarter production dropped 15pc year on year to 4,569t. However, Antam exported all ferronickel, mainly to South Korea, India, and China. Price spreads favored MHP over ferronickel in recent quarters. Consequently, asset utilization tilted toward low-grade ore supply. Antam 1H nickel ore output doubles, but ferronickel remains cyclical.

EV supply chain momentum supports long-term strategy

Antam’s battery JV with CATL targets start-up by 2026. The project anchors upstream-to-cathode integration in Indonesia. Meanwhile, ore grade trends and permitting will influence HPAL costs. Therefore, stable domestic feed becomes a strategic hedge. Antam 1H nickel ore output doubles, reinforcing Indonesia’s EV supply chain leadership.

The Metalnomist Commentary

Antam’s pivot to low-grade ore for MHP underscores where margins sit today. Watch HPAL ramp rates, ore grade drift, and policy signals. Any RKAB or environmental delays could tighten MHP and lift nickel sulfate premia.

Danantara Weda Bay Nickel Stake Plan Signals Stronger Indonesian Control

Weda Bay Nickel

Danantara Weda Bay Nickel stake interest signals Indonesia’s push to increase domestic participation in strategic nickel assets. The sovereign investment agency is considering acquiring Eramet’s stake in Weda Bay Nickel after discussions with president Prabowo Subianto.

Danantara Weda Bay Nickel stake talks remain at an early stage, with no final decision made. But the move shows that Jakarta wants stronger local ownership in assets central to its electric vehicle battery supply chain strategy.

Danantara Weda Bay Nickel stake interest comes as Indonesia continues to use policy, quotas and state-backed entities to shape the nickel value chain. The country wants to capture more value from mining, processing and downstream battery materials.

Weda Bay Nickel is located in North Maluku and has operated under a special mining permit since 2019. It is one of Indonesia’s most important nickel ore assets.

Domestic Participation Becomes a Strategic Priority

Danantara could position itself as a strong local partner in Weda Bay Nickel. That role would support Indonesia’s broader effort to increase national participation in critical mineral assets.

Eramet currently holds around 37.8% of the project. China’s Tsingshan owns about 51.2%, while state-controlled Aneka Tambang holds roughly 10%.

This ownership structure already reflects Indonesia’s nickel strategy. Foreign capital and Chinese processing expertise have helped build the sector, but Jakarta is now seeking greater domestic influence over key assets.

A Danantara investment would not only change ownership. It could also strengthen state-linked oversight of production, ore allocation and downstream integration.

For Eramet, the talks come at a sensitive time. The company has already faced pressure after Weda Bay Nickel’s 2026 RKAB production quota was cut sharply.

RKAB Quota Cut Raises Nickel Supply Uncertainty

Eramet confirmed in February that Weda Bay Nickel’s 2026 RKAB quota was reduced by 70% to 12mn wet metric tonnes. That cut has made the asset’s production outlook more uncertain.

The quota reduction matters because Indonesia’s downstream nickel capacity depends on stable ore supply. Smelters, high-pressure acid leach plants and battery-material producers need consistent feedstock to maintain output.

Weda Bay Nickel is a key part of that supply chain. Any change in ownership, production quota or operating strategy can affect ore availability and regional nickel pricing.

Indonesia is trying to balance several goals at once. It wants more state participation, higher domestic value capture, stronger downstream processing and continued investor confidence.

Danantara’s potential entry could help align Weda Bay Nickel more closely with national policy. But it may also raise questions for foreign partners about operating certainty and long-term control.

The nickel market should watch whether the talks progress from early-stage discussions into a formal transaction. If Danantara moves ahead, it would mark another step in Indonesia’s shift from attracting foreign nickel investment to actively reshaping ownership of strategic assets.

The Metalnomist Commentary

Danantara’s interest in Weda Bay Nickel shows that Indonesia’s nickel strategy is entering a more state-directed phase. The key risk is whether greater domestic control can improve supply-chain resilience without unsettling the foreign capital and technical partners that built the sector.

SHFE Indonesian Nickel Cathode Brands Strengthen Indonesia’s Class I Nickel Role

The Shanghai Futures Exchange

SHFE Indonesian nickel cathode brands have gained a major credibility boost after the Shanghai Futures Exchange approved two Indonesian-produced nickel cathode brands for delivery against SHFE contracts. The approvals cover PTENICO from Eternal Nickel Industry and DX zwdx from CNGR Dingxing New Energy.

The approvals mark an important step in Indonesia’s move from nickel ore and intermediate products toward exchange-deliverable Class I nickel. Indonesia has already become the world’s dominant nickel processing hub, but exchange approval gives its refined metal greater financial-market recognition.

SHFE Indonesian nickel cathode brands also reinforce the role of Chinese-backed industrial parks in building Indonesia’s downstream nickel value chain. Both approved producers are linked to major Chinese groups with strong positions in stainless steel or battery materials.

The development matters because exchange-deliverable nickel sits at the intersection of physical supply, futures market liquidity and industrial procurement. Approval by SHFE gives the brands wider acceptance among Chinese market participants and strengthens Indonesia’s role in Class I nickel trade.

Tsingshan and CNGR Extend Indonesia’s Refined Nickel Platform

Eternal Nickel Industry’s PTENICO brand was approved by SHFE after previously being listed on the London Metal Exchange on 16 December 2025. The company is a subsidiary of Chinese stainless steel producer Tsingshan Holding Group.

The plant is located in the Weda Bay Industrial Park in Halmahera, North Maluku. It uses an electrolytic process and has 50,000 t/yr of nickel cathode capacity, with nickel content of 99.96%.

Tsingshan’s involvement is strategically important. The group transformed global nickel markets through Indonesian nickel pig iron and stainless steel expansion, and it is now extending that influence into refined Class I nickel.

CNGR Dingxing New Energy’s DX zwdx brand was also approved by SHFE. The plant is located at the Indonesia Morowali Industrial Park and also uses an electrolytic process. It has 50,000 t/yr of nickel cathode capacity, with nickel content of 99.96%.

CNGR Dingxing is a subsidiary of CNGR, a major Chinese lithium-ion battery cathode active material precursor producer. This gives the brand a direct connection to battery materials supply chains, not only stainless steel demand.

The LME accepted CNGR Dingxing’s Indonesian nickel cathode brand in May 2024. It also approved cobalt cathode produced by CNGR in Qinzhou, Guangxi, in March, showing the company’s expanding exchange-approved metals footprint.

Together, PTENICO and DX zwdx represent 100,000 t/yr of Indonesian nickel cathode capacity. Their SHFE approval gives Indonesia a stronger position in futures-linked refined nickel supply.

Exchange Approval Changes Nickel Market Positioning

The two brands are the first Indonesian-produced nickel cathodes approved by SHFE for delivery. That is significant because Indonesia’s nickel rise was initially built around ore, nickel pig iron, ferronickel, matte and mixed hydroxide precipitate.

Exchange-deliverable cathode is a different market category. It requires tighter quality control, brand recognition and acceptance by financial and physical market users.

SHFE has approved Chinese-produced nickel cathode brands totalling 121,000 t since 2024. Adding Indonesian brands expands the pool of deliverable material and shows how Indonesia is being integrated into China’s nickel pricing and delivery system.

This could gradually influence nickel market structure. More deliverable Indonesian metal may improve flexibility for Chinese buyers, increase acceptable supply for futures settlement and strengthen the link between Indonesian production and Chinese exchange pricing.

The approvals also come during a period of Class I nickel oversupply. LME and SHFE inventories have risen as new refined nickel capacity has entered the market faster than demand growth from batteries and alloys.

Against that backdrop, brand approval can become a competitive advantage. Producers with exchange-deliverable status may have better access to financing, trade channels and customers that require recognised specifications.

For Indonesia, the approval supports a broader industrial policy objective. The country wants to capture more value from its nickel resources by moving beyond raw ore and intermediate exports into higher-value metal and battery materials.

For China, the approvals deepen supply-chain integration with Indonesian assets. Chinese companies are not only investing in Indonesian mines and smelters; they are building exchange-recognised refined metal capacity that can serve Chinese industrial and financial markets.

The Metalnomist Commentary

SHFE approval of Indonesian nickel cathode brands confirms that Indonesia is moving deeper into Class I nickel, not only bulk stainless and battery intermediates. The strategic issue now is whether this new exchange-deliverable capacity strengthens market liquidity or adds further pressure to an already oversupplied refined nickel market.

Indonesia’s VDNI Nickel Output Rises but Losses Persist in 2024

Indonesia’s VDNI

Higher Nickel Production Fails to Offset Heavy Losses

Indonesia’s Virtue Dragon Nickel Industry (VDNI) increased nickel pig iron (NPI) output in 2024 but still posted significant losses. The company, controlled by China’s Jiangsu Delong Nickel Industry, produced 675,300 tonnes of NPI, a 2.1% rise from 2023. However, VDNI reported operating revenue of ¥6.56bn ($910mn) and a net loss of ¥1.61bn ($224mn).

The losses stemmed largely from an impairment linked to accounts receivable from Jiangsu Delong. The group’s stainless steel plant filed for bankruptcy in 2024, compounding financial pressures. Additionally, currency depreciations in both the Indonesian rupiah and Chinese yuan weighed heavily on VDNI’s results.

Outlook for Recovery in 2025

Despite financial setbacks, VDNI expects profitability to rebound in 2025. The company highlighted improvements in operational performance and plant utilization during 2024. With a nameplate capacity of 100,000 tonnes per year in nickel metal equivalent, VDNI remains a key producer within Indonesia’s fast-expanding nickel sector.

Delong’s control of multiple assets, including Gunbuster Nickel Industry, strengthens its footprint in Sulawesi’s nickel belt. However, challenges such as fluctuating currency values and the aftershocks of Delong’s financial troubles remain significant risks.

The Metalnomist Commentary

VDNI’s case underscores the fragile balance between production growth and financial stability in Indonesia’s nickel sector. Rising output alone cannot shield producers from external shocks such as currency depreciation or parent-company bankruptcies. The industry’s resilience in 2025 will depend on stabilizing financial structures alongside continued production expansion.

Nickel Ore Prices Fall as Philippine Supply Recovery Eases Feedstock Tightness

Philippine Nickel ore

Nickel ore prices have fallen as Philippine supply recovered after the monsoon season, while a correction in London Metal Exchange nickel weakened sentiment across the value chain. The decline shows how quickly seasonal ore flows can pressure feedstock markets when Indonesian buyers slow procurement.

Nickel ore prices for 1.3% grade material on a cif China basis dropped to 55-57 yuan/wmt on 14 May from 65-66 yuan/wmt on 26 March. The fall came even though LME nickel remained above late-March levels after briefly touching almost two-year highs earlier in May.

Nickel ore prices are important because ore often gives the earliest physical signal in the nickel chain. Unlike LME nickel, ore prices are less driven by financial flows and more directly tied to mine supply, port congestion, smelter demand and buyer inventories.

The current weakness reflects three forces moving together: Philippine mine supply is recovering, Indonesia is slowing purchases, and LME nickel has corrected after earlier policy-driven gains.

Philippine Supply Recovery Changes the Regional Ore Balance

The Philippines is entering its seasonal production recovery after monsoon-related disruptions. Mining activity in Surigao, the country’s main nickel ore hub, usually slows from November to March and rebounds from May.

Surigao accounts for around half of Philippine nickel ore output. As shipments recover, buyers have more nearby feedstock options, reducing the urgency that supported prices earlier in the year.

This seasonal pattern has become more important since Indonesia emerged as a major Philippine ore importer. Historically, Chinese buyers stocked up ahead of the rainy season and drew down inventories until supply returned. But Indonesia’s rising demand has added a second major pull on Philippine material.

The Philippines exported 55.22mn t of nickel ore in 2025. China took 72% of that volume, while Indonesia accounted for 18%.

Indonesia’s imports from the Philippines rose to 15.48mn t in 2025 from 9.55mn t in 2024. That growth was driven by tight domestic ore controls under Indonesia’s RKAB quota system.

Indonesia imported 1.41mn t of Philippine nickel ore in March, up sharply from both a year earlier and the previous month. But that buying momentum has now slowed as port bottlenecks and price uncertainty weigh on procurement.

Indonesia Bottlenecks and NPI Margins Pressure Demand

Most Philippine ore shipped to Indonesia moves to the Weda Bay industrial park. The site produced around one third of Indonesia’s total nickel supply in 2025, making it a major feedstock demand centre.

But Weda Bay has limited unloading capacity. Only two major berths handle nickel ore discharge, creating recurring congestion.

Some vessels that would normally unload within two days are waiting up to two weeks. That congestion reduces buyers’ willingness to secure additional cargoes, especially when prices are falling.

Indonesia’s revised ore pricing formula has also changed buyer behaviour. The new formula includes cobalt, iron and chromium values, raising raw material costs and adding uncertainty to procurement decisions.

Meanwhile, LME nickel’s pullback has started to pressure nickel pig iron prices. NPI prices had been relatively steady, supported by stainless steel demand, but softer benchmark prices are now weakening producer margins.

Lower margins can reduce production incentives for Chinese NPI producers. That, in turn, may reduce demand for nickel ore and extend downward pressure on feedstock prices.

Nickel sulphate prices have remained stable because tight supply has offset weak demand from the nickel-cobalt-manganese battery sector. But the ore market is moving faster because supply is returning and buyers are stepping back.

The short-term outlook remains soft. Rising Philippine availability, weaker LME sentiment and slower Indonesian buying are likely to keep nickel ore under pressure until the market finds a new floor.

The Metalnomist Commentary

Nickel ore prices are showing that Indonesia’s downstream expansion has made Philippine supply more strategically important. But when port bottlenecks, weaker NPI margins and seasonal supply recovery hit together, even tight Indonesian ore controls cannot prevent a feedstock correction.

Nickel Industries RKAB Quota Secures Feedstock for Indonesian HPAL Expansion

RKAB

Nickel Industries RKAB quota approval gives the Australian producer a stronger feedstock position in Indonesia’s tightening nickel market. The company has secured a 2026 nickel ore quota of 14.3mn wet metric tonnes, supporting both its rotary kiln electric furnace operations and its expanding battery-grade nickel platform.

The approved quota represents a 36pc increase from the company’s 10.5mn wmt quota in 2025. Of the total, up to 6mn wmt of saprolite ore will supply Nickel Industries’ RKEF operations, while 8.3mn wmt of limonite ore will support feed requirements for the Excelsior Nickel Cobalt HPAL project.

Nickel Industries RKAB quota approval follows the company’s receipt of an environmental permit from Indonesia’s environment ministry. The AMDAL permit is valid for five years and could support a further quota increase to around 19mn wmt in 2026, giving the company room to apply for additional feedstock later this year.

ENC HPAL Project Raises Nickel Industries’ Battery Materials Exposure

The ENC HPAL project is central to Nickel Industries’ shift beyond ferronickel and nickel pig iron-linked operations. The project is expected to be commissioned in the first quarter and is designed to produce 72,000 t/yr of nickel in mixed hydroxide precipitate, nickel sulphate, and nickel cathode.

This matters because limonite ore availability is becoming increasingly strategic in Indonesia. HPAL plants require consistent limonite feed to produce MHP and downstream nickel chemicals for batteries. Any restriction in ore quotas can directly affect project ramp-up schedules, operating rates, and customer supply planning.

Nickel Industries RKAB quota approval therefore gives the company an advantage over producers facing sharper quota cuts. It also supports the company’s ability to position ENC as part of Indonesia’s growing battery materials supply chain, where nickel intermediate production remains a major source of global supply growth.

Indonesia’s Quota Tightening Keeps Ore Supply Risk High

Indonesia’s wider nickel market remains under pressure despite Nickel Industries’ higher quota. The government plans to cut the 2026 RKAB nickel production quota to 260mn-270mn t from about 379mn t in 2025. That reduction signals a more controlled policy environment and tighter ore availability across the sector.

The impact is already visible. Weda Bay Nickel reportedly saw its RKAB cut by 70pc to 12mn wmt this year, showing that quota approvals are becoming more selective. Producers with stronger environmental approvals and clearer downstream integration may be better positioned, while others face greater uncertainty.

Nickel Industries also experienced the operational risk of delayed approvals. Its nickel ore production fell 77pc year on year to 1.67mn wmt in October-December 2025 because of downtime linked to RKAB delays. The company has since resumed operations at Hengjaya and expects mine sales to recover, but the episode shows how regulatory timing can quickly affect Indonesian nickel output.

The Metalnomist Commentary

Indonesia’s nickel market is entering a more disciplined phase where permits, ESG compliance, and quota access matter as much as installed capacity. Nickel Industries’ approval is positive, but the wider RKAB tightening means ore security will remain one of the biggest risks for nickel and battery materials supply.

BSE On-Spec MHP Output Marks a New Step in Indonesia’s Nickel Battery Chain

Harum Energy

BSE on-spec MHP output marks an important commissioning milestone for Indonesia’s battery materials industry. Blue Sparking Energy has now produced qualified mixed hydroxide precipitate at its HPAL plant in Weda Bay Industrial Park. That confirms the project has moved beyond early trial production into a more advanced operating stage. As a result, BSE on-spec MHP output strengthens confidence in another major Indonesian downstream nickel asset.

This matters because MHP remains a critical intermediate product for the battery supply chain. BSE’s plant has nameplate capacity of 67,000 t/yr of nickel in MHP and 7,500 t/yr of cobalt. Those are meaningful volumes for a project that only began trial production in late November 2025. Therefore, BSE on-spec MHP output signals that new capacity in Indonesia is still moving forward despite a crowded nickel market.

The achievement also matters at the industrial park level. BSE is now the second MHP producer operating in IWIP after Huafei. That adds another layer of downstream conversion inside one of Indonesia’s most important nickel processing hubs. Consequently, Weda Bay MHP production is gaining more depth and scale.

Indonesia HPAL Plant Commissioning Is Advancing Toward Stable Operations

The Indonesia HPAL plant operated by BSE now appears closer to commercial readiness. Producing on-spec material is one of the most important steps in any HPAL commissioning cycle. It shows the process can deliver product quality that meets market requirements. Therefore, the milestone matters more than a simple trial output update.

HPAL projects are rarely judged only by design capacity. They are judged by whether they can ramp safely, consistently, and within product specification. BSE began construction in late December 2023 and initially targeted early 2026 for commercial operations. As a result, this update suggests the plant is moving broadly in line with that schedule.

This progress also reinforces Indonesia’s commitment to downstream nickel conversion. The country has built strong momentum in NPI, matte, and now MHP capacity. However, each new HPAL success still matters because technical execution remains difficult. Therefore, BSE on-spec MHP output is a useful operating signal for the wider market.

Weda Bay MHP Production Supports Harum’s Broader Downstream Strategy

Weda Bay MHP production also fits clearly into Harum Energy’s broader portfolio strategy. Harum already controls downstream assets through subsidiaries producing NPI and nickel matte. Adding qualified MHP output gives the group stronger exposure across multiple processing routes. Consequently, the company is building a more diversified nickel conversion platform.

That portfolio approach matters in the current market. Different nickel products serve different end markets, from stainless steel to battery chemicals. A producer with exposure to NPI, matte, and MHP can respond more flexibly to changing demand and pricing conditions. Therefore, BSE on-spec MHP output strengthens Harum’s strategic position, even in an oversupplied nickel environment.

The timing is also notable because more Indonesian battery-materials capacity is still coming. Harum also holds a stake in Nickel Industries, whose ENC project is preparing to add more nickel units through MHP, sulphate, and cathode production. As a result, BSE’s milestone is part of a broader wave of Indonesian downstream growth rather than a standalone event.

The Metalnomist Commentary

This milestone is important because it shows Indonesia’s nickel chain is still expanding deeper into battery materials. The real question now is not whether new HPAL projects can start. It is whether the market can absorb all this qualified downstream supply without further margin pressure.

Indonesia Battery Ecosystem Project Moves Forward With New Chinese Partnership

Aneka Tambang

The Indonesia battery ecosystem project is moving into a new phase with a fresh Chinese partnership. Antam, Industri Baterai Indonesia, and HYD Investment signed a framework agreement to develop an integrated battery ecosystem in Indonesia. This follows the exit of LG Energy Solution in 2025. As a result, the Indonesia battery ecosystem project remains alive and strategically important.

The change in partners matters because the project scale remains significant. Antam said the planned investment value is around $5-6 billion. A joint feasibility study will now define the next steps. Therefore, the Indonesia battery ecosystem project is shifting from partner transition into renewed execution planning.

HYD brings a strong industrial base to the table. The consortium includes Zhejiang Huayou Cobalt, EVE Energy, and Daaz Bara Lestari. That mix adds processing, battery, and investment capability. Consequently, the project gains a broader foundation across the battery value chain.

Indonesia Nickel Battery Chain Expands From Ore to Cells

The Indonesia nickel battery chain is central to this project’s logic. Planned facilities include an RKEF plant with 100,000 t/yr of nickel metal equivalent capacity. The project also includes an HPAL plant with 50,000 t/yr of nickel metal equivalent capacity. Therefore, upstream and midstream nickel conversion remain core pillars.

The downstream ambition is equally important. The project is expected to produce 105,000 t/yr of precursors and 30,000 t/yr of cathode materials. It also aims to build 20 GWh per year of nickel-based battery capacity. As a result, the Indonesia battery ecosystem project goes well beyond raw material processing.

Battery recycling also appears in the plan. The proposed recycling capacity is capped at 10,000 t/yr. That addition supports a more circular industrial model. Meanwhile, Antam will supply the nickel ore required for the project.

Antam Battery Project Reinforces Indonesia’s Downstream Strategy

The Antam battery project fits directly into Indonesia’s long-term downstream policy. Jakarta wants to build a local battery industry from mining to refining to final battery production. This new agreement supports that goal with another large integrated platform. Therefore, the project has national strategic value, not just commercial relevance.

This also shows Indonesia’s flexibility in partner management. LGES may have exited, but the broader industrial objective did not disappear. Instead, the project has been restructured around a new consortium. As a result, Indonesia continues pushing its battery ambitions despite partner turnover.

Antam’s role is becoming even more central. The company is involved in this project and also has a separate EV battery joint venture with CATL. That CATL-linked venture is expected to start operations by 2026. Consequently, Antam is emerging as one of the key anchors in Indonesia’s nickel battery chain.

The Metalnomist Commentary

This partnership matters because it shows Indonesia’s battery strategy is bigger than any one foreign partner. The country is still determined to convert nickel strength into downstream battery power. If execution improves, Indonesia could become one of the most integrated battery manufacturing hubs outside China.

Indonesia Solar Energy Transition Gains Momentum with $60mn JETP Support

PLN Indonesia Power

Floating Solar Project in Java Advances Despite U.S. JETP Withdrawal

Indonesia’s solar energy transition has taken a significant step forward, with $60 million in new funding for the Saguling floating solar project. The support comes under the Just Energy Transition Partnership (JETP) and involves joint development by PLN Indonesia Power and Saudi-listed Acwa Power. Despite U.S. withdrawal from the JETP earlier in 2025, international backing continues, reinforcing Indonesia’s commitment to phasing out coal.

Multilateral Support Drives Renewable Investment

The Saguling solar project will receive financing from DEG (Germany), Proparco (France), and Standard Chartered, as announced by GFANZ. This adds to the $1.2 billion Indonesia has already secured under the $20 billion JETP framework. France has played a major role, contributing over €450 million ($511 million) in energy transition funding. According to GFANZ, this investment shows strong appetite among both public and private actors to support Indonesia’s solar energy transition.

Coal Dominates, But Solar Begins to Scale

Indonesia still relies on coal for over 61% of electricity, while solar and wind contribute only 0.2%. However, Indonesia holds solar potential of 3,295GW, and projects like Saguling are vital for unlocking that capacity. The Saguling floating solar farm will add 92MWp and reduce carbon emissions by 63,100 t/year. It will increase Indonesia’s solar share by 13%, with renewables projected to rise to 21% of the energy mix by 2030, and 41% by 2040, according to Ember.

The Metalnomist Commentary

Indonesia’s solar energy transition is proving resilient, even amid shifting geopolitical support. The latest JETP-backed investment reaffirms that international climate finance remains a critical pillar in Asia’s coal phase-out.

Indonesia-China EV battery joint venture to start output by 2026

PT AnekaTambang

Indonesia-China EV battery joint venture is set to start operations in 2026, marking a milestone in Southeast Asia’s battery industry. PT Aneka Tambang (Antam) and CATL are leading the $5.9bn project, which will significantly expand Indonesia’s role in global EV supply chains. The Indonesia-China EV battery joint venture aims for 15GWh capacity by 2028, supporting up to 300,000 EVs annually.

A $5.9bn integrated ecosystem for battery materials

The joint venture begins with a 6.9GWh capacity, expanding to 15GWh by 2028. Additionally, officials highlighted potential integration with solar panel battery storage, raising capacity to 40GWh. Most of the investment—around $4.7bn—will fund nickel smelters, mining, and precursor plants in North Maluku. Meanwhile, the battery cell project in West Java accounts for $1.2bn of the total budget.

Indonesia’s mineral advantage meets China’s battery expertise

Indonesia holds abundant nickel, cobalt, and manganese, essential for EV batteries, but lacks lithium and advanced technology. Therefore, Antam partnered with CATL to secure the expertise and technology required. By 2026, smelting and hydrometallurgy plants, alongside a nickel-cobalt-manganese precursor facility, are expected to strengthen Indonesia’s midstream value chain. This partnership underscores a growing alignment between Indonesia’s resource base and China’s global battery leadership.

Energy independence and EV market expansion

The Indonesia-China EV battery joint venture could supply batteries for 300,000 EVs annually, potentially reducing fuel imports by 300,000 kilolitres per year. President Prabowo stated that Indonesia could reach full energy self-sufficiency within five to seven years, provided battery production grows to 100GWh annually. As a result, Indonesia is positioning itself not just as a raw material supplier but as an integrated EV hub.

The Metalnomist Commentary

Indonesia’s partnership with CATL cements its role in the global EV battery supply chain. However, success depends on infrastructure, environmental safeguards, and balancing resource nationalism with foreign investment. If executed effectively, Indonesia could become a strategic alternative to China-dominated supply routes.

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.

Indonesia HPM Formula Raises Nickel Ore Cost Risk for HPAL Producers

ESDM

Indonesia HPM formula changes will reshape nickel ore pricing from 15 April, adding new cost pressure across the country’s nickel processing chain. The energy and mineral resources ministry revised the mineral benchmark price mechanism for nickel and aluminium ore, with nickel valuation now expanded beyond nickel content alone.

The Indonesia HPM formula raises the correction factor for 1.6% nickel ore to 30%, compared with the previous 20% correction factor for 1.9% ore. Under the new framework, the correction factor rises or falls by one percentage point for every 0.1% change in nickel content.

This means the correction factor for 1.9% nickel ore will rise to 33%. The change increases the official value of nickel ore and could raise taxes, royalties and feedstock costs for processors that rely on HPM-linked transactions.

The Indonesia HPM formula also adds cobalt, iron and chromium into ore valuation. This is a major policy shift because these contained elements were not previously priced in the same way. Indonesia is now moving toward a more complete ore-value model, especially for laterite ores used in battery and stainless steel supply chains.

Cobalt, Iron and Chromium Inclusion Changes Nickel Ore Valuation

Indonesia’s new nickel HPM framework gives cobalt a correction factor of 30% when ore contains at least 0.05% cobalt. This is particularly important for high-pressure acid leach producers because cobalt-bearing ore can generate additional value through mixed hydroxide precipitate.

The ministry also introduced a 10% correction factor for iron when ore contains 35% or less iron. Chromium content also carries a 10% correction factor. These additions make ore valuation more complex and link pricing more closely to the full chemistry of laterite deposits.

The inclusion of cobalt is the most strategically important change. Indonesia’s HPAL projects produce nickel-cobalt intermediates for battery supply chains, and cobalt content can materially affect project economics. By taxing cobalt-bearing value inside ore, Jakarta is capturing more upstream rent from battery-linked mineral flows.

The Indonesia HPM formula therefore moves beyond a simple nickel-grade benchmark. It pushes the country toward a broader mineral-value system that recognises by-product metals and secondary contained value.

The ministry kept the Harga Mineral Acuan reference price unchanged. This means the immediate policy impact comes from correction factors and added contained elements, rather than a change in the headline reference price.

Market participants are now assessing how the new rules will pass through to actual transactions. For nickel ore used in rotary kiln-electric furnace production, spot prices remain nearly double the HPM level. This limits the immediate impact on some stainless-linked ore trades because market prices already sit well above the official benchmark.

The impact is likely to be much stronger for HPAL ore. Ore used in HPAL processing often trades without the same premium seen in RKEF feedstock. As a result, the revised HPM formula could lift transacted HPAL ore prices by more than a third.

That cost increase would move directly into battery-grade nickel economics. Market participants estimate that higher ore prices and taxes could raise mixed hydroxide precipitate production costs by more than $1,000/t in nickel metal equivalent.

This matters because Indonesia has become the centre of global MHP supply growth. Chinese-backed HPAL projects rely on Indonesian ore, sulphuric acid, energy and logistics to supply nickel and cobalt intermediates to global battery chains. Higher ore costs could narrow margins across MHP, nickel sulphate and cathode material supply.

The change also arrives during a period of wider nickel policy uncertainty. Indonesia has been tightening mining quotas, reviewing export taxes and seeking greater value capture from its mineral resources. The revised HPM formula fits that direction by increasing government control over pricing and taxable value.

Nickel Policy Shift Extends to Bauxite and Signals Broader Resource Control

Indonesia’s pricing reform did not stop at nickel. The ministry also revised the HPM formula for bauxite, changing the price basis to dollars per wet metric tonne from dollars per dry metric tonne.

The bauxite change adds a silica discount and raises the correction factor to $1.40/wmt for each one percentage point increase in aluminium oxide content. The previous formula used $1/dmt. This changes how moisture and ore quality are reflected in benchmark pricing.

The ministry also changed the price basis for lead ore to dollars per wet metric tonne from dollars per dry metric tonne. This effectively removes moisture content from the pricing formula and simplifies the benchmark around wet material values.

These changes suggest a broader policy direction. Indonesia is refining benchmark pricing across mineral commodities to improve tax collection, capture more contained value and align official pricing with ore quality.

For nickel, the change has immediate market significance because Indonesia dominates global laterite supply. Nickel ore pricing affects stainless steel, ferronickel, nickel pig iron, MHP, nickel sulphate and battery cathode supply chains.

The Shanghai Futures Exchange nickel price response showed that traders are treating the policy as price-supportive. Nickel closed at Yn136,900/t after rising from Yn133,010/t on 3 April, with participants citing support from the revised HMA-linked pricing framework.

However, the real market impact will depend on how producers, smelters and government agencies implement the rules. If HPM-based taxes rise sharply while spot ore prices remain high, margin pressure could build across processors with weaker cost positions.

HPAL producers are the most exposed because their feedstock pricing may move more directly with the revised benchmark. RKEF operators may see less immediate change because their ore costs already reflect strong market premiums.

For battery materials buyers, the risk is that Indonesia’s cost base becomes more expensive even as global nickel markets remain oversupplied. Higher ore valuation may not tighten physical supply immediately, but it can raise the floor for production costs in one of the world’s most important nickel processing hubs.

For Indonesia, the policy strengthens resource sovereignty. The government is using pricing formulas, mining quotas, export controls and tax compliance to ensure that more mineral value stays inside the country. This could support domestic revenue and downstream investment, but it may also increase uncertainty for processors and foreign investors.

The new framework also creates a precedent. If Indonesia successfully captures more value from cobalt, iron and chromium in nickel ore, other resource-rich countries may consider similar contained-metal pricing models.

The Metalnomist Commentary

Indonesia’s revised HPM formula shows that nickel policy is moving from volume control to value capture. The biggest impact will fall on HPAL producers, where cobalt-bearing ore valuation could raise MHP costs and change battery nickel economics.

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.

Indonesia Nickel Royalty Changes Delayed as Jakarta Balances State Revenue and Producer Costs

Indonesia Nickel

Indonesia nickel royalty changes have been delayed as the government reviews planned royalty increases and export taxes for nickel products. Jakarta is trying to balance higher state revenue with the cost pressure already facing miners, smelters and battery-material producers.

Indonesia nickel royalty changes were initially expected to take effect in June. But the energy and mineral resources ministry will now reassess the policy after industry consultations.

Indonesia nickel royalty changes are part of a wider policy reset covering nickel, copper, tin, gold, silver and other minerals. The government wants a formula that captures more value for the state without damaging investment in downstream processing.

The delay also applies to planned export duties on nickel products. Indonesia will continue finalising the pricing mechanism for the duty, but implementation has been pushed back.

Downstreaming Policy Meets Rising Cost Pressure

Indonesia’s nickel export duty plan is tied to its downstreaming strategy. The policy aims to push mining and metals companies to build more domestic value-added capacity instead of exporting lower-value materials.

The country has already become the world’s most important nickel processing hub. However, officials say the sector has developed only about 40% of its potential, leaving room for more investment in battery materials, stainless steel and other downstream products.

The royalty delay shows that Indonesia understands the risk of overloading producers with too many cost increases at once. Miners and processors are already dealing with tighter RKAB quotas, higher ore costs and rising input risks.

Indonesia updated its nickel ore pricing formula on 15 April. The new mechanism includes cobalt, iron and chromium in ore valuation, increasing raw material costs for downstream users.

This change is especially important for high-pressure acid leach projects, which consume limonite ore and produce mixed hydroxide precipitate for battery supply chains. Higher ore prices can raise costs for nickel intermediates and reduce margins.

Sulphur supply risk is another pressure point. Middle East disruption has raised concerns over sulphur availability, a key input for nickel processing. This has supported nickel prices but also increased uncertainty for producers.

Nickel Prices Supported by Policy and Supply Risk

Indonesia’s recent policy shifts have generally supported nickel prices. LME nickel rose to around $19,450/t on 6 May from $18,075/t on 15 April, supported by the revised ore pricing formula, sulphur supply concerns and lower 2026 RKAB quota expectations.

The delayed royalty and export tax changes may ease immediate producer pressure. But they do not reverse the broader direction of Indonesian policy.

Jakarta still wants to capture more value from its mineral resources. It also wants companies to keep investing in domestic processing and a more complete nickel supply chain.

For the nickel market, this creates a more policy-sensitive pricing environment. Ore quotas, benchmark formulas, export taxes, royalties and downstream investment rules can all influence costs and trade flows.

The delay gives producers time, but not certainty. Companies will still need to plan for higher government take, stricter ore valuation and stronger pressure to invest in domestic value-added products.

Indonesia’s nickel strategy is therefore entering a more complex phase. The country wants to remain the dominant global nickel hub, but it must avoid weakening the economics that attracted downstream investment in the first place.

The Metalnomist Commentary

Indonesia’s delay is not a retreat from resource nationalism; it is a recalibration. Jakarta wants more value from nickel, but it also knows that excessive cost pressure could slow the downstreaming model that made Indonesia central to global battery and stainless steel supply.

China and Indonesia Strengthen Ties in Critical Minerals and Renewable Energy

Strengthen Mineral

China and Indonesia are poised to deepen their cooperation in critical mineral extraction and renewable energy, marking a strategic move as global demand for clean energy technologies continues to grow. The announcement came during Indonesian President Prabowo Subianto's inaugural visit to China from November 8–10. The collaboration emphasizes joint initiatives in new energy vehicles, lithium batteries, and photovoltaics, reflecting the two nations' shared commitment to energy transition and economic synergy.

Strategic Agreements and Investments

During President Prabowo's visit, China reaffirmed its support for Indonesia's energy sector transformation, pledging to pursue "high-quality" partnerships in digital economies, clean energy, and infrastructure development. Addressing a business forum on November 10, Prabowo welcomed increased investment from Chinese enterprises across a range of industries.

Significant agreements were sealed during the visit, including a high-pressure acid leaching (HPAL) project in Sulawesi, jointly developed by Green Eco-Manufacture (GEM) and mining giant Vale Indonesia. This project will produce mixed hydroxide precipitate (MHP), a critical precursor in battery cathode production, further strengthening Indonesia’s position in the electric vehicle (EV) battery supply chain.

Indonesia’s Growing Role in Global Nickel and Aluminium Markets

As the world’s largest nickel producer, Indonesia is central to global EV and battery markets. According to the International Nickel Study Group (INSG), the country's share of global nickel output is projected to rise to 60.6% in 2024 and 62.8% in 2025, driven largely by Chinese-backed projects.

Additionally, Chinese firms are investing heavily in Indonesia's aluminium industry. Nanshan Aluminium is expanding its alumina refinery in Bintan and constructing a 250,000 t/yr refined aluminium plant. Chalco and Tianshan Aluminium are each building 1mn t/yr alumina plants in Indonesia, signaling a robust growth trajectory for bilateral collaboration in critical mineral production.

Key Projects in Renewable Energy

Chinese battery materials company Changzhou Liyuan, in partnership with the Indonesia Investment Authority (INA), is scaling up its lithium iron phosphate (LFP) plant in Indonesia. By 2025, the facility's production capacity is expected to expand to 120,000 t/yr from its current 30,000 t/yr, making it the largest LFP plant outside China.

These developments underscore the growing interdependence of China and Indonesia in renewable energy and critical minerals, aligning their national priorities with global sustainability goals.

Indonesia Carbon Market CBAM Strategy Targets Green Nickel and Stainless Steel Future

Indonesia Carbon

Indonesia is accelerating its carbon market development in coordination with the European Union ahead of the 2026 CBAM rollout. The Indonesia carbon market CBAM strategy aims to help domestic producers avoid punitive tariffs by establishing a mandatory emissions trading system (ETS) and promoting decarbonization.

ETS and Green Industrial Strategy in Development

Indonesia’s Ministry of Industry is working with the European Commission to design a carbon market aligned with the EU’s Carbon Border Adjustment Mechanism (CBAM). According to Apit Pria Nugraha, Head of the Centre for Green Industry, the goal is to use carbon credits to offset CBAM tariffs for sectors like stainless steel. Although nickel is not directly included in the CBAM, it faces indirect exposure through downstream products.

Indonesia is upgrading furnaces, enhancing ESG standards, and preparing export-focused green incentives. These include preferential treatment for certified green products and financing tools to support innovation. Nugraha emphasized that companies meeting CBAM and ESG targets early will benefit from price premiums and stronger global partnerships.

Nickel Industry Prepares for ESG-Driven Market Shift

Indonesia’s nickel sector, vital to the EV battery supply chain, is adapting quickly to ESG scrutiny. Nickel Industries, a major producer, announced plans to reduce its carbon footprint by deploying solar power and heat recovery systems in high-pressure acid leaching operations. The company’s carbon intensity is projected at 6.97 tonnes of CO₂ per tonne of nickel, nearly half the industry average.

M. Muchtazar, Head of Sustainability at Nickel Industries, noted that ESG is now a top competitive factor. Compliance with EU carbon regulations is no longer optional as automakers demand cleaner supply chains for EV materials.

CBAM to Reshape Global Trade Dynamics

CBAM will act as a de facto import tariff on high-emission goods entering the EU. Simon Goess of Carboneer estimated that importers of 85,000 tonnes of pig iron, ferro-nickel, and crude steel could face up to €40 million in charges by 2034. As CBAM expands to include Class 1 nickel and indirect emissions, producers must lower carbon intensity to remain globally competitive.

Nugraha concluded that “green nickel” is more than a buzzword—it’s a strategic imperative for Indonesia’s industrial future.

The Metalnomist Commentary

Indonesia’s proactive stance on carbon pricing and ESG compliance signals a significant policy shift. By integrating CBAM-aligned mechanisms and promoting low-carbon nickel, Indonesia positions itself as a preferred supplier in the evolving global metals supply chain.