Indonesia's Nickel Ore Grades Fall to 1.52% as Quotas Tighten Supply and Lift Costs
Updated
Updated · cruxinvestor.com · Jun 10
Indonesia's Nickel Ore Grades Fall to 1.52% as Quotas Tighten Supply and Lift Costs
2 articles · Updated · cruxinvestor.com · Jun 10
Summary
Ore grades in Indonesia fell to 1.52% in 2025 from 1.66% in 2024, with most spot material now at 1.3%-1.4%, cutting feed quality for the world's dominant nickel supplier.
That decline is raising processing costs and reducing effective supply, while tighter quota controls have already halted mining at Weda Bay after it exhausted allocations and faced fines worth tens of millions of dollars.
Indonesia is also routing nickel transactions through a new sovereign-linked entity to monitor tax compliance, especially among offshore Chinese operators, adding another layer of state oversight to the market.
Mark Selby said Jakarta appears to be managing nickel prices in an $18,000-$21,000 band for the next year or two, even as tighter fundamentals and renewed deal activity improve the medium-term outlook.
M&A interest is building around assets such as Lifezone Metals, while companies including Canada Nickel and First Atlantic are testing hydrogen-related uses for nickel-bearing geology as a longer-term value stream.
Indonesia is squeezing nickel supply to manage prices. Is the global EV market unknowingly headed for a massive supply shock?
As Indonesia's state fund seizes nickel control, are Chinese giants facing a 'hostile takeover' or a new strategic partnership?
While Indonesia expands 'dirty nickel' production, can new rock-to-hydrogen technology offer the West a clean, green alternative?
Indonesia’s Nickel Policy Shift: Quota Reductions, Ore Grade Decline, and the New Era of Global Supply Tightening
Overview
Indonesia’s recent policy decisions have led to a profound and structural tightening in the global nickel supply, causing immediate impacts on market dynamics and prices. By substantially reducing mining quotas for 2026 and shifting to annual approvals, Indonesia is moving towards a model that prioritizes value addition and revenue generation over sheer volume. This one-third reduction in permitted output signals Indonesia’s ambition to exert greater control over the global nickel market, positioning itself as a key player and influencing both supply and pricing strategies worldwide.