Indonesia will cut the world's largest nickel mine production.

Critical Nickel Decision from the Indonesian Government

The Indonesian government plans to impose production restrictions at the world's largest nickel mine. This move comes as part of efforts to reduce supply in order to boost global nickel prices.

Significant Decrease in Production Quota

According to officials, PT Weda Bay Nickel will be allocated a production quota of only 12 million tons for the year 2023. This figure falls significantly short of the targeted 42 million tons by 2025. This mine, located on Halmahera Island, is owned by Chinese Tsingshan Holding Group, French Eramet SA, and Indonesian PT Aneka Tambang.

Impact of Supply Restrictions

Indonesia is taking strict measures to revive the prices of its largest export product by reducing the production volumes of major mining companies. Prior to these restrictions, the country's supply had reached approximately 65% of global production, leading to a decline in nickel prices for two consecutive years.

Decline in Nickel Prices and Demand Issues

Nikel prices rose last month when Indonesia announced plans to reduce its mining production from the 2025 target of 379 million tons to around 260 million tons. However, last year's actual supply fell short of this target. Despite being used in various fields such as stainless steel and electric vehicle batteries, disappointing battery demand has arisen due to the transition to nickel-free chemicals.