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.

Eramet Weda Bay Nickel Quota Cut Raises New Supply Risks for Indonesia

PT Weda Bay Nickel

Eramet Weda Bay nickel quota cut has become a major new concern for the global nickel market. PT Weda Bay Nickel received a 2026 RKAB quota of just 12mn wet metric tonnes. That is far below its 42mn wmt allocation in 2025. As a result, Eramet Weda Bay nickel quota cut is intensifying fears over tighter Indonesian ore supply.

This matters because Weda Bay Nickel is the world’s largest nickel mine. The operation is a joint venture between Eramet and Tsingshan. It also remains the dominant ore supplier to Weda Bay Industrial Park. Therefore, a 70pc quota reduction creates risk far beyond one company.

The company had requested an unchanged 42mn wmt allocation for 2026. That request included 3mn t for its own NPI smelter in Weda Bay. The final decision came in far lower than that level. Consequently, the market now sees a much tighter supply environment than expected.

Indonesia Nickel Ore Supply Faces a Sharper Constraint

Indonesia nickel ore supply is now under stronger pressure as the government tightens RKAB approvals. Jakarta had already signalled a lower national quota of 260mn-270mn t for 2026. The Weda Bay decision now gives that policy a much more concrete impact. As a result, ore tightness is no longer a theory. It is becoming a real operating issue.

Weda Bay Nickel plans to submit another application for a higher quota. That means policy uncertainty is still not fully settled. However, the current reduction already changes market expectations. Therefore, 2026 nickel prices may stay supported while smelters wait for clearer guidance.

Imports may help at the margin, but they cannot fully solve the problem. Weda Bay is too important to replace easily. If ore flows stay constrained, downstream output will likely face pressure. Meanwhile, project timelines could also come under strain.

Weda Bay Industrial Park Could Face Production and Expansion Pressure

Weda Bay Industrial Park is especially exposed because it depends heavily on Weda Bay ore. The site hosts major MHP, NPI, and matte capacity. That includes Huafei and the newly launched Blue Sparking Energy MHP project. Therefore, Eramet Weda Bay nickel quota cut could affect both current production and future ramp-ups.

The scale of IWIP makes this even more important. The park is projected to produce around 550,000t in nickel metal equivalent in 2025. That makes it Indonesia’s largest nickel production hub, ahead of IMIP. As a result, any ore disruption at Weda Bay has system-wide importance.

The market now faces a new question. Can Indonesia keep downstream growth on track while holding ore supply tighter? That question will shape the next phase of nickel pricing, project execution, and investor confidence. Consequently, the quota decision may become one of the most important nickel policy signals of 2026.

The Metalnomist Commentary

This quota cut matters because it targets the ore source that feeds Indonesia’s most important nickel hub. The key shift is clear. Indonesia is no longer acting only as a volume maximizer. It is acting more like a supply manager, and the nickel market will have to reprice that reality.

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.

Weda Bay Power Shift Favors Aluminium as Nickel Pig Iron Margins Weaken

Weda Bay

Weda Bay power shift plans could redirect electricity from nickel pig iron smelters toward aluminium production in Indonesia’s Weda Bay Industrial Park. The move shows how power allocation is becoming a strategic production tool when aluminium margins exceed nickel margins.

Weda Bay power shift discussions involve scaling back output at 22 NPI smelting operations in June. Market sources said the power would be redirected to Juwan, the park’s sole operating aluminium facility.

Weda Bay power shift strategy reflects changing metal economics. NPI producers are under pressure from higher nickel ore costs and weaker margins, while aluminium smelters are benefiting from firmer prices and Middle East supply concerns.

Juwan is a joint venture between Tsingshan and Xinfa, with nameplate capacity of 250,000 t/yr. The timing and scale of any NPI production cuts remain unclear.

Aluminium Margins Pull Power Away From NPI

The planned power reallocation highlights the importance of electricity in Indonesian metals production. Both NPI and aluminium smelting are power-intensive, so the most profitable metal can influence where electricity is directed.

Aluminium prices have strengthened because of supply disruption linked to the Middle East. The region accounts for about 9% of global aluminium output, making any disruption significant for global balance.

The LME aluminium cash official price rose to a four-year high of $3,767.50/t on 14 May before closing at $3,636/t on 18 May. These higher prices have improved aluminium smelting margins.

NPI margins are moving in the opposite direction. Rising nickel ore costs and weaker profitability have reduced the incentive to maintain full output at some Indonesian smelters.

This creates a clear commercial logic. If electricity is constrained or strategically controlled, producers may prefer to allocate power toward aluminium rather than lower-margin NPI.

NPI Cuts Could Tighten High-Grade Nickel Units

Any sustained reduction in Weda Bay NPI output could support nickel pig iron prices, especially for higher-grade material. Higher-grade NPI remains important for stainless steel producers that need nickel-rich blending units.

Demand for higher-grade NPI has stayed relatively firm because stainless mills are using more scrap. Greater scrap use can increase the need for higher-nickel inputs to balance melt chemistry.

The situation also shows how Indonesia’s nickel and aluminium industries are becoming increasingly connected through infrastructure. Power, ports, industrial parks and Chinese-backed investment now shape multiple metal supply chains at once.

Tsingshan is also building a new aluminium project at Weda Bay with designed capacity of 800,000 t/yr. The first 400,000 t/yr phase is expected to start by the end of this year or in early 2027.

That expansion could make power allocation even more important. If aluminium capacity grows while NPI margins remain weak, Weda Bay may increasingly prioritise aluminium production over nickel pig iron during periods of electricity constraint.

The Metalnomist Commentary

Weda Bay shows that Indonesia’s industrial parks are becoming flexible metal platforms, not single-commodity hubs. When aluminium margins beat NPI margins, electricity itself becomes the deciding raw material.

Chengtun halts Indonesian nickel matte project as battery materials economics shift

Chengtun

Chengtun halts Indonesian nickel matte project after reassessing the market outlook. The company says the investment no longer meets expectations. As a result, Chengtun halts Indonesian nickel matte project before construction begins.

The paused plan targeted Weda Bay on Halmahera, Indonesia. Chengtun formed a venture with a planned $245mn investment. The facility aimed for 40,000 t/yr of nickel matte in nickel equivalent.

Why Chengtun paused Weda Bay expansion

Chengtun halts Indonesian nickel matte project while it restructures its Indonesian growth plan. The project missed its original late-2023 launch window. However, it never advanced beyond planning and preparation.

Chengtun will dissolve the ChengMach Nickel venture after the halt. The decision reduces near-term supply growth expectations at Weda Bay. Therefore, market participants may reassess which projects stay financeable.

Meanwhile, Chengtun keeps operational flexibility through its Youshan Nickel project at Weda Bay. The site can switch output across high-nickel matte, low-nickel matte, and NPI. That flexibility helps the company respond faster to changing price signals.

What it means for nickel sulphate and NCM battery supply

Nickel matte feeds nickel sulphate production for battery materials. Nickel sulphate supports NCM precursor manufacturing alongside cobalt and manganese sulphates. As a result, the pause signals pressure across the upstream EV battery chain.

Battery producers still require stable nickel units and consistent chemistry. However, producers now scrutinize conversion routes and margin stacking more aggressively. Therefore, integrated refiners may capture advantage when they control feed and logistics.

The decision also highlights Indonesia’s evolving role in battery metals. Indonesia still offers scale and resource depth at Weda Bay. Yet investors now demand clearer returns across sulphate, precursor, and cathode pathways.

The Metalnomist Commentary

Chengtun halts Indonesian nickel matte project as the industry shifts from growth-at-all-costs to margin discipline. However, flexible plants will still win when demand rebounds. The next cycle will reward operators who can pivot between battery and stainless markets.

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.

Eternal Nickel LME listing reshapes Indonesian nickel trade

Eternal Nickel

The Eternal Nickel LME listing marks a new phase for Indonesian nickel as PTENICO cathodes move toward global benchmark status and add fresh liquidity to a market already facing surplus pressure. Eternal Nickel, a subsidiary of China’s Tsingshan Group, has applied for the Eternal Nickel LME listing with full-plate nickel cathodes produced at Weda Bay in North Maluku, where nameplate capacity reaches 50,000 t/yr. As a result, the Eternal Nickel LME listing would cement Indonesia’s role in refined nickel, not just intermediate products, while also deepening the pool of deliverable brands for price discovery on the London Metal Exchange.

Eternal Nickel LME listing adds to Asian LME nickel capacity

The proposed Eternal Nickel LME listing comes only months after the first Indonesian brand, DX-zwdx, secured LME approval in 2024, lifting new Asian registered capacity to 232,600 t since mid-2023. PTENICO cathodes would be the second Indonesian nickel brand listed, reinforcing the rapid shift of refined nickel capacity toward Indonesia as high-pressure acid leach and conversion projects mature. Meanwhile, surplus nickel has been flowing into LME warehouses because many producers find LME delivery the most efficient route to immediate liquidity. LME nickel stocks climbed to 224,700 t in September from 162,336 t in January, with Chinese-origin material surging to 152,454 t from 81,564 t. Therefore, any additional Indonesian cathode tonnage registered on the LME is likely to weigh further on prices, even if it improves tradability and hedging options for consumers.

Surplus stocks pressure prices as more Indonesian cathodes line up

The Eternal Nickel LME listing would arrive in a market where the official three-month LME nickel price has stayed rangebound around $15,000–16,000/t, averaging just $15,432/t in 2024. However, producers continue to commission new cathode capacity and are actively preparing LME applications, treating warehouses as an outlet for surplus production rather than cutting supply. Indonesian producer Nickel Industries Limited plans to add nickel cathode output, while major producer QMB is upgrading its technology to produce LME-grade cathodes, both from plants in Central Sulawesi. As these projects advance, more Indonesian cathode brands are expected to seek registration, reinforcing the structural oversupply narrative and keeping spot prices under pressure, even as stainless steel and battery sectors look for cost advantages.

The Metalnomist Commentary

The Eternal Nickel LME listing underlines how Indonesia is moving rapidly up the nickel value chain from ore and intermediates to globally deliverable cathode brands. For traders and hedgers, more Indonesian brands enhance liquidity and flexibility, but they also lock in a heavier overhang of exchange stocks that can cap rallies. Strategically, the trend raises important questions for non-Indonesian producers: competing on cost alone against the Weda Bay and Sulawesi hubs will be tough, making product differentiation, specialty alloys and long-term customer partnerships more critical than ever.

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.

Indonesia nickel mine suspensions highlight tighter ESG enforcement and supply risk

Indonesia Nickel Mine

Indonesia nickel mine suspensions in southeast Sulawesi underline Jakarta’s tougher stance on reclamation and post-mining responsibilities. The Ministry of Energy & Mineral Resources (ESDM) has halted operations at 25 nickel mines over missing reclamation and post-mining guarantees. Indonesia nickel mine suspensions now sit within a broader crackdown that also targets coal, gold, iron ore, tin and asphalt producers across several provinces.

Indonesia nickel mine suspensions tied to reclamation failures and permit gaps

Indonesia nickel mine suspensions follow months of warning letters issued between December 2024 and August 2025. Regulators moved only after companies failed to respond with compliant reclamation plans and financial guarantees. The 25 affected nickel operators in southeast Sulawesi join a wider list of 190 suspended general mining licences from central Kalimantan to north Maluku.

However, the sanctions are temporary and may last up to 60 days if companies act quickly. Suspended firms must continue site maintenance, environmental management and monitoring to limit further damage. The ESDM has also sent suspension notices to some nickel mines in north Maluku, signalling that enforcement will not stay confined to one region. As a result, miners now face clear pressure to treat reclamation, guarantees and forestry permits as core licence conditions, not paperwork.

The Indonesia nickel mine suspensions add to recent high-profile actions by a government taskforce. Earlier this month, authorities seized land from Weda Bay Nickel and Tonia Mitra Sejahtera for lacking forestry permits. That decision pushed LME official nickel prices up by about 3pc on 15 September, underscoring how governance interventions can move global benchmarks. Traders now read enforcement news almost as closely as ore shipment updates.

Market impact limited today, but ore supply concerns are building

The immediate market impact from the Indonesia nickel mine suspensions appears modest. Some sanctioned operations were inactive or had unstable output, according to market participants. Three-month LME class 1 nickel prices were largely rangebound at the time of the announcement, with only minor intraday moves.

However, the cumulative effect of licence suspensions, land seizures and stricter forestry compliance is beginning to worry ore buyers. Indonesia remains the world’s dominant supplier of nickel ore and nickel units for stainless steel and battery precursors. Therefore, even small disruptions can tighten margins for NPI smelters and high-nickel battery material producers already facing narrow spreads.

Downstream, stainless steel and battery supply chains now need to factor regulatory risk into feedstock strategies. Some buyers may diversify towards the Philippines or consider higher use of recycled nickel where possible. But substitution options remain limited at scale, keeping Indonesia at the centre of nickel supply planning for the foreseeable future.

The Metalnomist Commentary

Indonesia’s nickel strategy is clearly shifting from volume-at-all-costs to stricter licence discipline and ESG alignment. For miners and smelters, the new reality is that reclamation guarantees and forestry permits sit on the same level as ore grades and cash costs. Policy risk in Indonesia is becoming a structural driver of nickel prices, not just an occasional headline shock.

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.

Nickel Deficit Forecast Emerges as Indonesia Tightens Ore Supply

Nickel manufacturing

Nickel deficit conditions are expected to return in 2026 as Indonesia tightens ore supply controls and stainless steel demand continues to grow. The International Nickel Study Group forecasts global primary nickel production of 3.715mn t against usage of 3.747mn t, implying a deficit of 32,000t.

The nickel deficit would mark a sharp change after three consecutive years of surplus. The market recorded surpluses of 175,000t in 2023, 116,000t in 2024 and 283,000t in 2025.

The nickel deficit forecast remains modest, but it carries strategic significance because it depends heavily on Indonesian policy. Indonesia has been the main driver of global nickel supply growth, and tighter controls on ore mining could slow the expansion that previously pushed the market into surplus.

The Middle East conflict is adding another layer of uncertainty. Higher energy prices, inflation pressure and disrupted sulphur flows could affect nickel production costs, especially for high-pressure acid leach operations in Indonesia.

Indonesia Ore Controls Reshape Nickel Supply Growth

Indonesia’s approved nickel ore mining quota for 2026 has been set significantly lower than in 2025. The quota can still be revised, but the initial reduction has already changed market expectations.

The country’s revised mineral benchmark pricing mechanism also took effect on 15 April. The new HPM formula raises base prices for all nickel ore grades and includes cobalt, iron and chromium in the valuation for the first time.

This matters because Indonesian nickel supply is no longer expanding under the same low-cost conditions that drove rapid output growth. Ore access, ore pricing, royalties and contained metal values are all becoming more tightly managed.

The policy impact is not evenly distributed. Eramet’s PT Weda Bay Nickel mine is preparing to enter care and maintenance in May after receiving an initial ore quota of just 12mn wet metric tonnes. This is far below last year’s final permit of up to 42mn wmt.

In contrast, Nickel Industries received quota approvals of 14.3mn wmt, up from 10.5mn wmt in 2025. This shows that Indonesia’s controls are not simply cutting all supply. They are also reshaping which operators receive ore access.

The quota system could therefore become a major competitive factor. Producers with larger approved volumes may gain stronger operating flexibility, while others face lower utilisation, higher costs or temporary shutdowns.

HPAL producers are especially exposed. These plants require steady limonite ore supply and large volumes of sulphuric acid or sulphur-linked feedstock. Tighter ore availability and higher reagent costs can quickly pressure margins.

Disrupted sulphur flows from the Middle East conflict have raised concern over HPAL feedstock availability. This is important because Indonesian HPAL projects have become key suppliers of mixed hydroxide precipitate for battery material production.

If sulphur costs remain elevated and ore prices rise under the new HPM formula, HPAL production costs could increase materially. That would weaken the low-cost supply advantage that helped Indonesia dominate battery-linked nickel intermediates.

Stainless Steel Supports Demand as Batteries Disappoint

Stainless steel remains the main support for nickel demand. INSG said the stainless steel sector grew in 2025 and is expected to expand further in 2026.

This is important because stainless steel still consumes far more nickel than the battery sector. Demand from stainless steel, alloys and industrial uses continues to anchor the primary nickel market.

Battery demand has grown more slowly than earlier expectations. Lithium iron phosphate chemistries have gained market share, reducing nickel intensity in parts of the electric vehicle market.

Plug-in hybrid electric vehicle demand has also outpaced fully battery-electric vehicle demand in some markets. This has limited the speed at which nickel-rich battery chemistries absorb new supply.

The result is a market caught between two forces. Supply growth is slowing because of Indonesian ore controls and higher input costs. However, battery demand is not rising fast enough to create a large structural shortage.

This makes the 2026 nickel deficit highly sensitive to policy and disruption. If Indonesia raises quotas, supply could recover. If sulphur, energy or ore costs worsen, the deficit could deepen.

The forecast also changes the market narrative. Nickel has spent recent years under pressure from surplus supply and rising inventories. A move into deficit, even a small one, could stabilise sentiment and support prices.

Still, the deficit is not yet a sign of broad scarcity. It is a warning that Indonesia’s supply discipline, not battery demand alone, is now determining the market balance.

For producers, cost control and ore access will become more important. For buyers, the focus will shift toward supplier reliability, feedstock route and exposure to Indonesian policy.

The Metalnomist Commentary

The nickel market is not tightening because batteries suddenly absorbed the surplus. It is tightening because Indonesia is putting discipline into ore supply while HPAL costs rise. That makes the nickel deficit more policy-driven than demand-driven.

Eramet's Nickel Production Faces Mixed Results in Second Quarter

In the second quarter, French mining giant Eramet experienced mixed results in its nickel and nickel ore production, with notable differences between its operations in Indonesia and New Caledonia. Improved productivity led to a rise in output at Weda Bay, Indonesia, while socio-political disturbances in New Caledonia caused significant declines.

Eramet's high-grade nickel ore production at Weda Bay surged by 56% to 5.913 million tonnes in the second quarter, maintaining the same growth rate in the first half of the year with a total production of 12.255 million tonnes. This increase was driven by an effective mining plan that improved the grade of marketable ore and enhanced inventory management.

Conversely, the production of low-grade nickel ferroalloys fell by 17% to 6,600 tonnes in nickel metal content, with a January-June output decline of 11% to 14,000 tonnes. This reduction was due to slowed production from one furnace in the first quarter and scheduled maintenance during the second quarter.

In New Caledonia, Eramet's subsidiary, Societe Le Nickel (SLN), saw a dramatic 73% year-on-year decline in nickel ore production to 389,000 tonnes in the second quarter. This was caused by a halt in mine production across the French-controlled territory due to safety concerns following violent outbreaks that damaged buildings and infrastructure, particularly affecting the Thio and Kouaoua sites. SLN's first-half ore output fell by more than half to 1.403 million tonnes.

Ferronickel production at SLN also dropped by 14% year-on-year in the first half of the year to 17,400 tonnes, hindered by reduced activities at the Doniambo plant. Violence in New Caledonia created difficulties in transporting nickel ore and other essential inputs to the plant.

Due to these challenges, Eramet revised its 2024 external ore sales target from 42 million wet metric tonnes (wmt) to 40 million wmt, as the government did not grant the permit for low-grade saprolite sales.

SLN's financial situation in New Caledonia remains "extremely critical," with most mines suspended since mid-April and the Doniambo plant operating on minimal technical power. Eramet has decided not to provide further financing to SLN but continues to support its operations. In line with an agreement signed in April between Eramet and the French government, France issued €80 million in funding to SLN in July, providing essential support for its ongoing operations.

Weiming Launches Nickel Cathode Production in Zhejiang Province

Weiming

Chinese Manufacturer Aims to Boost Nickel Output with New Facility

Weiming, a major Chinese environmental protection equipment manufacturer, has started producing nickel cathodes at its subsidiary, Weiming Shengqing, located in Wenzhou, Zhejiang province. This development marks a significant milestone as the company ramps up its nickel production capacity to meet growing global demand for the metal.

The first phase of the project is focused on a 25,000-tonne-per-year (t/yr) production capacity for nickel cathodes. Weiming is progressing well with this phase, and it expects to complete the second phase—also adding another 25,000 t/yr—by the first half of 2025. Once fully operational, the plant will contribute significantly to China's nickel supply, which is essential for battery production and other industrial applications.

Sourcing Raw Materials for Cathode Production

Weiming uses nickel matte and mixed-hydroxide-precipitate (MHP) as the primary feedstocks for its nickel cathode production. In August 2024, the company received its first shipment of nickel matte from Indonesia, amounting to 1,429 tons. This shipment marks a key milestone in Weiming’s strategy to secure reliable and sustainable sources of raw materials for its operations.

The company also operates the Jiaman high nickel matte project in Indonesia in partnership with Merit International Capital. This project, with a nameplate capacity of 40,000 tons per year of nickel metal equivalent, is poised to further support Weiming’s nickel supply chain. Located in the Weda Bay region of North Maluku Province, the project features four production lines, each capable of producing 10,000 tons of nickel metal equivalent annually.

Future Outlook for Weiming's Nickel Production

As the demand for nickel continues to rise, particularly in the electric vehicle (EV) and battery sectors, Weiming's expansion into nickel cathode production strengthens its position in the global metals market. The company’s strategic investments in Indonesia, alongside its domestic production capacity, will help ensure a steady supply of nickel to meet both local and international demand.

With the second phase of the production facility expected to complete by mid-2025, Weiming is set to play an increasingly pivotal role in global nickel production. This expansion reflects broader trends in the metals industry, where companies are focusing on securing sustainable and high-quality feedstocks to support the green energy transition.

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Eramet Signs Nickel Deal with Indonesian Sovereign Funds to Expand EV Battery Ecosystem

Eramet Group

Partnership Targets Integrated Mining and Processing Value Chain in Indonesia

Eramet signs nickel deal with Indonesian sovereign funds to advance a sustainable and integrated electric vehicle (EV) battery raw materials ecosystem in Indonesia. The French mining group signed an initial agreement with Danantara and the Indonesia Investment Authority (INA), both sovereign investment agencies. Together, they aim to identify key projects and develop a roadmap for upstream and downstream EV value chain development.

The partnership will leverage long-term capital from Danantara and INA to finance critical infrastructure, while Eramet will lead the mining and processing operations. These projects will align with global environmental and social standards. This strategic collaboration comes as Indonesia strengthens its position as a hub for nickel-based EV battery materials, particularly amid global supply chain diversification efforts.

Eramet already holds a 38.7% stake in PT Weda Bay Nickel in partnership with China’s Tsingshan Group, producing nickel and ferronickel. The company has expressed plans to expand its nickel operations in Indonesia by acquiring new mining permits. However, with the Indonesian government tightening permit issuance, partnerships with state-backed investors offer Eramet a pathway to secure strategic access. As Eramet signs nickel deal with Indonesian sovereign funds, it reinforces Indonesia’s emergence as a global center for battery metals.

The Metalnomist Commentary

Eramet’s alliance with Indonesian sovereign funds highlights a growing trend: securing nickel supply through vertically integrated, ESG-compliant partnerships. As Indonesia tightens mining access, collaboration with state capital becomes essential for companies seeking long-term footholds in EV-critical materials.

GEM MHP output cut tightens Indonesia battery nickel feedstock

GEM

A GEM MHP output cut in Indonesia is tightening near-term nickel feedstock for batteries. Market participants say GEM will halve monthly mixed hydroxide precipitate output to about 6,000t nickel equivalent. However, limited tailings capacity at Morowali operations drives the decision.

This is the second forced cut tied to tailings disposal constraints. In March, a landslide at subsidiary QMB halted output for 45 days. Meanwhile, the plant restarted in May and returned to design rates in July.

The scale of GEM’s Indonesian portfolio makes the cut market-relevant. It runs three MHP projects with 150,000t/yr nameplate capacity across Sulawesi. Output reached 79,916t nickel equivalent in January–September, up 150% year on year. Therefore, a move to 6,000t per month can dampen spot MHP availability.

MHP economics and cobalt content reshape feedstock choices

MHP demand rose because it can replace nickel matte in downstream refining. Producers value MHP’s economics and its cobalt content for precursor production. Meanwhile, Democratic Republic of Congo export restrictions tightened cobalt availability and lifted MHP interest. As a result, tighter MHP supply can ripple into nickel sulfate and cathode schedules.

Tailings and ESG pressure intensify in Indonesia’s HPAL boom

Indonesia’s HPAL expansion has increased tailings volumes and raised ESG scrutiny. Companies must prove safe disposal as investors and customers demand traceability. Meanwhile, the government has suspended some mines for weak reclamation guarantees. Authorities also seized land from Weda Bay Nickel and Tonia Mitra Sejahtera over forestry permit gaps.

The Metalnomist Commentary

The GEM MHP output cut shows how waste management now caps nickel growth, not ore supply. However, repeated disruptions will push buyers toward diversified feedstock and stricter contracts. Therefore, Indonesian HPAL operators must invest early in tailings systems to protect market access.

Nickel Industries Acquires 51% Stake in Indonesian Nickel-Cobalt Project

Nickel Industries

Australian-based Nickel Industries has officially acquired a 51% stake in the Siduarsi nickel-cobalt project located in West Papua, Indonesia, as announced on Monday. This acquisition is part of a larger agreement made in September 2021 with Iriana Mutiara Mining, which grants Nickel Industries the opportunity to eventually own 100% of the project, contingent upon certain conditions being met.

Further Investment Potential in Siduarsi Project

Nickel Industries has the potential to expand its stake to 82.5% pending the approval of a feasibility study by the Indonesian Mines Department. The Siduarsi deposit covers 16,470 hectares and is estimated to hold 52 million dry metric tonnes of mineral resources, with nickel concentrations at 1.1% and cobalt at 0.1%.

Initial testing has confirmed that the deposit’s limonite and saprolite ores are suitable for high-pressure acid leaching (HPAL) and rotary kiln electric furnace (RKEF) operations. According to Nickel Industries managing director Justin Werner, the primary focus will be on shipping limonite ore directly to the Weda Bay Industrial Park, though the potential for HPAL processing offers opportunities for producing higher-value products like mixed hydroxide precipitate (MHP), nickel sulphate, and nickel cathode.

Nickel Industries already has significant interests in Indonesia, including an 80% stake in four nickel projects and a stake in two HPAL projects, producing a variety of nickel products, including NPI, matte, MHP, and nickel sulphate.

China Nickel Sulphate Market Holds Firm Amid Supply Tightness and Weak NCM Demand

Nickel Sulphate

China nickel sulphate prices have remained stable for over a month due to constrained supply and sluggish demand from the NCM battery sector. Despite declining output and elevated feedstock costs, producers have resisted lowering prices to protect margins. The China nickel sulphate market is now facing a complex supply-demand imbalance shaped by both upstream disruptions and shifting downstream preferences.

Feedstock Supply Disruptions Tighten Production Margins

Nickel sulphate output in April dropped to 30,000 tonnes (nickel metal equivalent), down 13% month-on-month and 18% year-on-year. Cumulative output for January–April stood at 127,000 tonnes, 1.6% lower than the previous year, according to CNIA data. This production cut stems from limited availability of mixed hydroxide precipitate (MHP) and nickel matte, both critical inputs for sulphate production. Heavy rainfall in Morowali, Indonesia, disrupted MHP production in March and April, reducing output by 5,500 tonnes. At the same time, matte producers in China shifted to more profitable nickel pig iron (NPI), reducing matte availability. Consequently, the payable indicators for MHP and matte rose significantly, eroding margins and compelling some plants—like those in Guangxi—to convert from matte to MHP feedstock. These factors have kept the China nickel sulphate market tight despite weak demand.

NCM Battery Demand Shrinks as LFP Dominance Grows

While supply tightens, demand has faltered. NCM and NCA batteries, once dominant, have lost significant market share to lithium iron phosphate (LFP) chemistries. As of April, NCM batteries accounted for just 20% of China’s battery output, while NCA stood at 17%, down from a combined 65% in 2019. This shift has impacted upstream nickel demand, causing several international projects to stall. In recent months, Eramet and BASF withdrew from their Weda Bay refining JV, and Hanrui Cobalt cancelled its MHP investment in Indonesia. Meanwhile, automakers like Volkswagen are pivoting toward LFP technology to cut costs. Demand for NCM batteries is expected to remain weak through Q2 2024, with some exporters front-loading shipments earlier in the year due to global trade tensions. As a result, the China nickel sulphate market remains under pressure, with producers navigating tight margins amid uncertain downstream growth.

The Metalnomist Commentary

China’s nickel sulphate market exemplifies the structural turbulence within the EV battery supply chain. As feedstock constraints collide with weakening demand for NCM chemistries, producers must brace for lower growth visibility and rising volatility across Asia’s nickel value chain.

Eramet and BASF Cancel $2.6 Billion Nickel Smelter Investment in Indonesia

French mining company Eramet and German chemical giant BASF have decided to cancel their planned joint investment in a nickel-cobalt refining complex in Weda Bay, Indonesia. This decision, announced on June 24, 2024, was made after a thorough evaluation of the project's feasibility and the current market conditions​.

The primary reason for the cancellation is the anticipated short-term oversupply of nickel, driven by a temporary stagnation in electric vehicle (EV) market demand, a phenomenon often referred to as the "chasm." BASF explained that with the global supply of nickel for EV batteries improving, the necessity for their investment in the Indonesian facility has diminished​​.

Eramet, while canceling this specific project, mentioned that it will continue to explore potential investments in the nickel EV battery value chain in Indonesia and will update the market when appropriate. The initial plan, announced in January 2023, aimed to invest $2.6 billion to build a high-pressure acid leach (HPAL) facility designed to produce 67,000 tons of nickel and 7,500 tons of cobalt annually​​.

Indonesian officials noted that the decision might also have been influenced by the existing and planned HPAL facilities in the country, which would make it easier to obtain mixed hydroxide precipitate (MHP) without needing substantial new capital expenditure​​.

This development reflects broader trends in the global nickel market, where Indonesia's share of nickel mine supply has surged from 26% in 2018 to 55% in 2023, with the production of nickel intermediates more than doubling over the same period. Despite the anticipated 8.7% increase in global nickel production this year, demand growth is expected to lag at around 4%​​.

Huayou Cobalt Commissions First Overseas Battery Precursor Plant in Indonesia

Huayou Cobalt

Huayou Cobalt, a leading Chinese producer of battery metals and materials, has officially launched its first overseas production facility for high-nickel ternary battery precursors in Indonesia. This significant milestone for the company marks its strategic move to expand operations internationally in response to shifting global regulations.

Key Details of the Indonesian Plant

• Location: The plant is located in the Weda Bay Industrial Park in North Maluku province.

• Capacity: Designed for a production capacity of 50,000 t/yr of high-nickel ternary battery precursors.

• Phased Rollout: Construction began in late April 2024, and the first phase is now operational. Specific capacities for each phase have not been disclosed.

This facility, officially named Huaneng, represents Huayou’s first non-FEOC (Foreign Entity of Concern) project in Indonesia.

Strategic Expansion in Battery Metals

Huayou has invested heavily in Indonesian projects over the years, diversifying its production capabilities outside China. The global expansion of Chinese battery firms is partly driven by regulations like the EU's Critical Raw Materials Act and the US Inflation Reduction Act. These laws restrict electric vehicles (EVs) containing battery components from FEOC-linked companies from qualifying for tax incentives, such as the $7,500 EV tax credit in the United States.

Broader Implications

Chinese battery companies are increasingly establishing production facilities in countries like the US, France, Morocco, South Korea, and Indonesia. These moves are designed to reduce geopolitical risks and ensure continued access to key EV markets, which are essential as global demand for electric vehicles accelerates.

Huayou’s new plant solidifies Indonesia’s position as a major hub for battery metals production, leveraging the country’s rich nickel reserves and strategic location in the EV supply chain.