(Feb 11): The world’s biggest nickel mine in Indonesia has been told to slash output, as authorities step up efforts to boost global prices of the battery metal.
PT Weda Bay Nickel has been notified it will receive 12 million tons of ore production quota this year, down from 42 million tons in 2025, according to people familiar with the matter. Nickel futures jumped in London following the news.
The mine on the island of Halmahera, North Maluku province, is owned by Tsingshan Holding Group Co, France’s Eramet SA and PT Aneka Tambang. In a statement on Wednesday, Eramet confirmed the size of the reduction in Weda Bay Nickel’s quota, and said the company intends to apply for a revision.
Indonesia has been taking drastic steps to revive prices of its biggest export commodity, largely through scaling back volumes that key miners are allowed to produce. Ahead of the latest round of cutbacks, supply from the Southeast Asian country had surged to about 65% of world production, sending prices into a two-year plunge that shuttered rivals in Australia and New Caledonia.
The country is taking similar steps in thermal coal, with mining quotas in the world’s biggest exporter set to be cut by nearly a quarter from the year before. The Indonesian Coal Mining Association said the measures may force some operations to shut, while overseas buyers could be left to scramble for alternative sources of the fossil fuel.
The authorities control miners’ output through the issue of annual permits, which are known locally by their initials as RKABs. The proposed full-year volumes can be adjusted at the mid-year mark, meaning that eventual amounts produced can differ from the initial figures.
See also: Soy oil rallies as India agrees to cut duties on US supplies
Nickel climbed last month after Indonesia flagged plans to cut mine output to about 260 million tons of ore this year, down from a 2025 target of 379 million tons, although actual supply last year would have been lower than that figure. The metal is used in both stainless steel and electric-vehicle batteries, but demand from the latter has disappointed due to switching to non-nickel chemistries.
The cut to Weda Bay Nickel’s output will be severe for the company, which originally had plans to expand production to more than 60 million tons of ore to support a massive nearby industrial park. Instead, the site has been forced to import large amounts of ore from the Philippines due to a lack of local supply.
A spokesperson for Indonesia’s Energy and Mineral Resources Ministry said quotas were still being evaluated, while a representative for Weda Bay Nickel did not respond to a request for comment. In addition, Tsingshan and Aneka Tambang didn’t respond to requests for comment.
See also: No silver lining in meltdown
Weda Bay Nickel is still facing a penalty for a breach of its forestry permit, which saw the government take control of 148 hectares at the site. The fine could be about three trillion rupiah, Bloomberg reported last month.
Uploaded by Evelyn Chan
