Indonesia Ramps Up Nickel Mining Quota: Where's The Price Target?

Nickel prices on the European commodity exchange LME dropped back to the US$17,000 per metric ton range after Indonesia increased quota approvals. Earlier in March, nickel prices for the three-month contract had surged past US$18,000 per metric ton, reaching the highest level since January 2023. However, the metal closed at US$17,395 per metric ton on March 19, marking a significant six percent drop within a week.

The Indonesian government, through the Ministry of Energy and Mineral Resources, has finally processed 107 work plans and budget estimates (RKAB) for nickel mining until March 18, 2024. Bambang Suswantono, Acting Director General of Minerals and Coal at the Ministry of Energy, revealed that these 107 RKABs for nickel mining have a production limit of 152.61 million tons for the period of 2024 to 2026. He mentioned that this evaluation process was conducted on a total of 731 mineral RKABs.

On a separate note, Djoko Widayanto, Director of the Indonesia Mining Association (IMA), stated that the submission of nickel RKABs was adjusted based on smelter factory demands to prevent oversupply. He warned that delays in issuing mining RKABs could potentially hinder nickel production in Indonesia. This situation may lead to a reversal from nickel supply surplus to deficit in 2024.