ASIATODAY.ID, JAKARTA – The Indonesian government has officially restricted new investment permits for nickel refining plants (smelters) across the country. The policy aims to strengthen Indonesia’s downstream industry strategy and prevent projects from stopping at intermediate products such as NPI, FeNi, MHP, or nickel matte.
The restriction is stipulated in Government Regulation (PP) No. 28 of 2025 on Risk-Based Business Licensing, signed by President Prabowo Subianto on June 5, 2025.
According to Annex 1.F 3534, which governs the Basic Non-Ferrous Metal Manufacturing Industry (KBLI 24202), the government now limits new smelter projects that only produce semi-finished nickel products.
“In carrying out nickel refining activities using pyrometallurgical technology, companies must provide a written statement declaring they will not produce NPI, FeNi, or nickel matte,” reads the regulation, quoted Friday, November 7, 2025.
The new rule is enforced through the Online Single Submission (OSS) system, requiring companies to commit to full downstream processing and value-added production — including refined nickel and electric vehicle (EV) battery materials.
Industrial License, Not Mining License
Under the new classification, nickel smelters are categorized as manufacturing industries, not mining operations. This means companies are required to obtain an Industrial Business License (IUI) issued by the Ministry of Industry, rather than a Special Mining Business License (IUPK) from the Ministry of Energy and Mineral Resources (ESDM).
In addition, the government also restricts new investment in smelters using hydrometallurgical technology, such as High Pressure Acid Leach (HPAL), if they only produce mixed hydroxide precipitate (MHP) as an intermediate product.
“In carrying out nickel refining activities using hydrometallurgical technology, companies must provide a statement that they will not produce MHP,” the regulation adds.
Driving Deeper Downstream Integration
This policy marks a new chapter in Indonesia’s nickel downstream strategy. The government seeks to ensure that incoming investments truly support integrated, high-value nickel production, rather than short-term, export-oriented projects.
The restriction aligns with Indonesia’s broader vision to build a sustainable nickel ecosystem, strengthen its role in the global EV battery supply chain, and promote green industry development under the principles of environmental, social, and governance (ESG) responsibility. (AT Network)
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