The Indonesian Ministry of Energy and Mineral Resources (ESDM) officials stated on February 10 that, the total approved nickel ore mining quotas for 2026 are estimated to be between 260 and 270 million tonnes. This marks another official statement following the confirmation of a "250-260 million tonne" target on January 14. The marginal figure has shifted slightly upward, but the overall range remains largely stable.
On February 11, media reported that PT Weda Bay Nickel (WBN), Indonesia's largest nickel mining company, received an initial approval of 12 million tonnes mining quotas for 2026. Subsequently, its joint venture partner, France's Eramet, issued an announcement confirming this and stated it would apply for a quota revision in accordance with procedures. This news echoes the previous day's official statement on total volume, translating the policy from an aggregate target to actual practices currently underway.
Compared to the approximately 379 million tonnes of quotas actually utilized in 2025, the quotas for 2026 represent a reduction of about 110 million tonnes. According to Mysteel's calculations, Indonesia's total nickel ore demand for 2026 is approximately 320-330 million tonnes, pointing to a gap of around 60-80 million tonnes compared with the currently announced quotas. Even considering carry-over inventory from 2025 and supplementary imports from the Philippines, a deficit of 30-40 million tonnes remains.
This implies that if the ESDM subsequently fails to provide supplementary quotas, the nickel ore market will shift from the "relative sufficient" of 2025 to "systematic tightness" expected in 2026.
And further insights can be drawn from the 12 million tonnes of mining quota already granted to WBN, which seemed to have triggered extensive concerns on the market.
First, it would be misleading to directly compare the 12 million tonnes approved for early 2026 with the 42 million tonnes available for WBN in 2025. The latter was the cumulative result of multiple approvals, including the base quota granted in early 2024, an additional annual quota in mid-2024, and a special new energy quota in mid-2025, which was an outcome of the "three-year approval" policy cycle combined with mid-year adjustments.
Instead, a more logical reference is the 16 million tonnes base quota approved in early 2024. Against this baseline, the 12 million tonnes represents a reduction of approximately 25%, rather than the 70% drop some market interpretations suggest.
Second, quota additions are highly probable in the rest of 2026. From a regulatory perspective, the Indonesian ESDM issued a decree on September 30, 2025, allowing companies to submit one RKAB revision application per year, provided it is completed by July 31.
In fact, Eramet has publicly confirmed its intention to "apply to increase its mining quotas as soon as possible," backed by a credible rationale that the annual ore demand from IWIP's already-operational smelting and HPAL facilities is estimated at over 100 million tonnes. In other words, the application is not a request for expansion, but a supply shortage tied to existing capacity.
From the government's standpoint, rejecting all such applications would risk a significant supply shortfall, undermining its stated goal of "ensuring stable industrial operations." Thus, the real question is not whether additions will occur, but by how much and through what process.
Third, regardless of the final quotas, the significance of approved 12 million tonnes mining quotas lies in what it signals. That is, the Indonesian government is demonstrating concrete resolve to enforce quota discipline, and major industry players have accepted this new baseline by engaging through formal channels to pursue revisions rather than resisting the framework. Moving forward, securing enough quotas will require enterprises to invest considerably more in both time and stakeholder communication.
Looking ahead, Indonesia's upcoming Ramadan brings critical challenges as the first quarter draws to a close. Enterprises still awaiting new quota allocations may temporarily draw on their 2024-approved quotas, but only for use in the first quarter. This makes March 31 the hard deadline for the transitional arrangement.
With Ramadan running from February 19 to March 20, government approval processes are expected to slow considerably. In other words, from the date of this writing through the end of the transition period, there remain merely around 10 working days.
However, so far, only a handful of major players, including Vale, WBN, and MBMA, have secured new quotas, with total approved volume standing at roughly 80 million tonnes. That leaves nearly 190 million tonnes still to be allocated to meet the full-year target of 260–270 million tonnes. Therefore, it is not only an administrative test for the ministry, but also a growing concern for the market whether the ESDM can process approvals for over 100 companies and nearly 200 million tonnes of quotas within such a tight timeframe.
For companies like WBN, which have already received base quota allocations for 2026, they are not bound by the first-quarter transition deadline for submitting revisions. However, they must follow a separate regulatory schedule.
Under ESDM rules, each company is allowed to submit one RKAB revision application per year, which must be finalized by July 31. This suggests that WBN's bid for additional quotas is unlikely to be resolved in the near term. Rather, it is expected to happen between late Q2 and early Q3.
The market needs to manage the expectations accordingly, because a genuine supply tightness will likely persist in Indonesia in the first half of the year, enterprises' production capacity for expansion will remain constrained, and the reliance on ore imports from the Philippines will continue.
Arif, Chairman of the Indonesian Nickel Forum (FINI), recently remarked that Indonesia's nickel ore imports in 2026 may grow to 50 million tonnes, around 30 million tonnes of which could come from the Philippines. Whether this projection materializes is open to debate, but the direction is telling that the imports from the Philippines are emerging as a potential lifeline for Indonesia's nickel ore supply balance.
In 2024 and 2025, Indonesia imported 9.55 million tonnes and 15.18 million tonnes of nickel ore from the Philippines, accounting for 21.2% and 27.7% of total exports from the country, respectively.
According to Mysteel's forecast, Indonesian imports of nickel more from the Philippines are expected to grow moderately to 20-25 million tonnes in 2026, which could partially offset the domestic supply deficit. Additionally, further observation is required regarding the export capacity of the Philippines and the willingness of Indonesian buyers to pay a premium.
Written by Aggie Hu, huchenying@mysteel.com
