[REVISION HISTORY]

Indonesia nickel quota reviews and sector instability

Updated 5 times since CLSTR started tracking revisions of this situation.

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2026-09-07 06:02 UTC → 2026-09-10 02:54 UTC · added ~~removed~~

In August 2026, Indonesia’s nickel sector faced intensified volatility as the Energy and Mineral Resources Ministry entered a critical approval stage for 2026 RKAB quota revisions. Following the July 31 application window closure, the Shanghai Futures Exchange’s main nickel contract rose 1.55% to 132,650 yuan/ton. Minister Bahlil Lahadalia maintained that the government would implement a “measured relaxation” of quotas, prioritizing firms that pay higher royalties. Energy instability has further complicated operations. Widespread electricity shortages have emerged, driven by a coal production crisis linked to reduced mining quotas and the Domestic Market Obligation (DMO) policy. ~~The DMO requires miners to sell 25% of production at a capped price of $70 per ton, a rate many producers find less profitable than paying non-compliance penalties.~~ These outages threaten the nickel processing sector, a vital link in the global electric vehicle supply chain. Financial ~~and operational~~ pressures are ~~mounting.~~ also mounting; PT Gunbuster Nickel Industry (GNI) announced plans to lay off up to 1,900 employees due to debt ~~restructuring and the cessation of two of its three smelters. Meanwhile,~~ restructuring, while Chinese-controlled ~~smelters, including Tsingshan Holding and Gem,~~ smelters have discussed coordinated production ~~cuts—potentially reducing mixed hydroxide precipitate (MHP) output by 30%—to~~ cuts to combat declining profitability. Supply chain and environmental concerns also persist. PT Vale Indonesia Tbk is seeking alternative sulfur sources to mitigate geopolitical risks in the Strait of Hormuz. Additionally, researchers warn that rapid nickel expansion may jeopardize critical ecosystems, complicating Indonesia’s goal to protect 30% of its territory by 2030. These shifts occur alongside a BUMN restructuring led by the Danantara Investment Management Agency to consolidate over 1,000 entities into approximately 200. By September 2026, the government began addressing the industry’s ~~dual reality~~ heavy reliance on high-emission industrial power. To reconcile its dominant market position with decarbonization needs, Deputy Minister of ~~corporate growth and local environmental challenges became more pronounced.~~ Environment Diaz Hendropriyono indicated that the Emissions Trading System (ETS), currently applied to coal-fired power plants, could be expanded to include the nickel sector. This cap-and-trade mechanism would require companies exceeding emission limits to purchase carbon units, while those below limits could sell excess units to create economic incentives for cleaner production.

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