Indonesia’s Ministry of Energy and Mineral Resources is reviewing a potential moratorium on nickel smelters producing intermediate products such as nickel pig iron and ferronickel, as global oversupply deepens. Minister Bahlil Lahadalia announced that the government is considering options to tighten regulations on smelters that generate intermediate items including ferronickel, nickel pig iron (NPI), nickel matte, and mixed hydroxide precipitate (MHP).
For 2026, the government projects that raw nickel ore production will reach approximately 290 million tons—surpassing the production quota range of 260 to 270 million tons set in the RKAB—while verified ore demand from smelters currently reaches approximately 320 million tons. Cecep Mochammad Yasin, Director of Mineral Business Guidance at the Ministry of ESDM, noted that verified nickel processing capacity currently stands at about 320 million tons.
Shifting Downstream Policy
Bahlil stated that the ministry aims to shift the direction of the national nickel industry away from simply expanding smelter capacity and toward developing industries that directly yield downstream products. The policy shift involves filtering which industrial segments will continue and which will face moratoriums, prioritizing facilities that directly deliver finished downstream goods. Commission XII member Bambang Patijaya supported the stance, stating that untuk Indonesia, kalau untuk smelter NPI kita sudah overload
(detikFinance). The overarching strategy relies on a downstream roadmap spanning 28 commodities across four sectors.
Nickel Oversupply Depresses Global Market Values
Global market conditions continue to weigh on the commodity, with nickel emerging as the worst-performing major metal in terms of price trends. Bahlil emphasized that current capacity and reserves have triggered an oversupply that depresses market values, prompting the review of intermediate industrial output.
