ASIATODAY.ID, JAKARTA — The Indonesian government has officially moved to end the era of uncontrolled nickel mining. Beginning in 2026, national nickel output will be tightly regulated and aligned strictly with the actual demand of domestic processing plants and smelters.
The Ministry of Energy and Mineral Resources (ESDM) confirmed that the policy will be enforced through adjustments to the Work Plan and Budget (RKAB), a key regulatory instrument used to manage production levels across the mining sector.
Minister of Energy and Mineral Resources, Bahlil Lahadalia said the production cut is critical to restoring balance between nickel ore supply from miners and demand from Indonesia’s rapidly expanding downstream industry.
“We will adjust production based on industrial demand. This is about nickel, and we want to create fair distribution,” Bahlil said during a press conference in Jakarta on Friday, January 9, 2026.
Production Caps to End Oversupply
The move aims to halt chronic oversupply of nickel ore, which has depressed prices and distorted market dynamics. Authorities believe that uncontrolled production has undermined the sustainability of Indonesia’s downstream strategy and widened inequality among industry players.
Under the revised RKAB framework, nickel production will no longer be driven by mining expansion, but by the real absorption capacity of smelters operating in Indonesia.
Smelters Required to Absorb Local Ore
In a parallel measure, the government will require large-scale nickel processing companies to source raw materials from local mining permit holders (IUPs).
The policy is designed to eliminate monopolistic practices in the supply chain and guarantee market access for regional mining entrepreneurs.
“Large industries must purchase ore from mining operators. There must be no monopoly—this is not allowed,” Bahlil stressed.
A Push for Fair and Inclusive Downstreaming
Although the government has yet to disclose specific production targets for 2026, the ESDM Ministry insists the policy is intended to benefit the entire nickel ecosystem—not just major investors.
According to Bahlil, true downstreaming is not merely about building smelters, but about fostering collaboration between large capital and local businesses, ensuring that value creation is shared more equitably.
“We want strong investors, but we also want strong local entrepreneurs. That is the true essence of fair downstreaming,” he said.
A Clear Signal to the Global Nickel Industry
The policy marks a major shift in Indonesia’s nickel governance, signaling tighter state control over one of the world’s most strategic minerals.
Going forward, nickel production will be managed more discipline, predictability, and fairness—strengthening Indonesia’s position in the global supply chain for batteries and clean energy. (AT Network)
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