Indonesia Pushes Downstream Nickel Investment Amid Proposed Smelter Moratorium
Thu 05 Nov 2026, 14:31 PM
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Indonesia's Ministry of Investment and Downstream Industry/BKPM has responded to growing concerns over an oversupply of nickel products in the international market and the Ministry of Energy and Mineral Resources' (ESDM) proposed moratorium on smelters producing intermediate nickel products.
Deputy for Strategic Investment Downstreaming at the Ministry of Investment/BKPM, Heldy Satrya Putera, said the proposed moratorium on intermediate-product smelters forms part of efforts to strengthen governance of Indonesia's nickel industry following the implementation of the nickel ore export ban.
"Concerns over an oversupply have emerged. The abundance of these products needs to be thoroughly assessed. The government's commitment is to develop a complete downstream ecosystem so that the supply can be absorbed by further processing industries within the country," Heldy said after the BRIN Critical Minerals Forum in Jakarta on Thursday (November 5, 2026).
Heldy emphasized that the government is encouraging the development of advanced nickel-based manufacturing industries, covering both the stainless steel supply chain and the electric vehicle (EV) battery ecosystem. The initiative is considered essential to maintaining stability in global nickel prices.
Regarding national investment realization, Indonesia recorded IDR 528.7 trillion in investment in the third quarter of 2026. Cumulatively, investment realization from January to September 2026 reached IDR 1,539.2 trillion, equivalent to 75.4% of the annual target.
"From an investment perspective, we continue to encourage the development of downstream industries so that the oversupply of nickel can be fully absorbed into end products, preventing further price declines," Heldy said.
Responding to the Ministry of Energy and Mineral Resources' proposed reduction in nickel production allocations under the 2027 Mining Work Plan and Budget (RKAB), Heldy confirmed that his ministry continues to coordinate with relevant authorities to minimize investor concerns.
Previously, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources, Tri Winarno, confirmed that adjustments involving reductions to nickel production quotas would be introduced in 2027 to manage market supply.
Minister of Energy and Mineral Resources Bahlil Lahadalia also highlighted the impact of Indonesia's excess nickel production on global prices, noting that nickel prices had fallen below USD 16,000 per tonne.
According to Bahlil, global nickel consumption stands at approximately 3.5 million tonnes, while Indonesia contributes an estimated 700,000 to 800,000 tonnes to the global oversupply.
Bahlil stressed the importance of halting new permits for smelters producing intermediate nickel products. Although Indonesia's nickel export value has increased significantly from USD 3.3 billion in 2017 to approximately USD 38–40 billion in 2026, around 50–60% of domestic smelter output still consists of semi-finished materials that are exported and subsequently reimported as finished products.
"It is important for the government to determine which industries should continue to develop and which should be subject to a moratorium, ensuring that the management of national natural resources remains measured and sustainable," Bahlil stated.
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