The Indonesian government has officially limited the development of new nickel smelters through the issuance of Government Regulation No. 28 of 2025, which introduces a risk-based business licensing system. This policy marks a strategic move to direct nickel investments toward higher value-added products.
Under the new framework, while nickel smelter investments were previously approved through the Industrial Business License (IUI), the regulation now restricts new smelters employing RKEF and HPAL technologies dedicated to producing nickel intermediate products.
The regulation explicitly prohibits the construction of non-ferrous metal processing facilities that only produce nickel semi-finished goods--such as nickel matte, mixed hydroxide precipitate (MHP), ferronickel (FeNi), and nickel pig iron (NPI).
Tri Winarno, Director General of Minerals and Coal at the Ministry of Energy and Mineral Resources (ESDM), explained that the restriction aims to support nickel prices while strengthening the downstream processing chain. During a hearing at the House of Representatives complex in Senayan, Central Jakarta on Monday (November 10, 2025), Tri clarified that the government's intent is not to halt investment entirely, but to shift the industry's focus from semi-finished to finished products.
The ministry expects this policy to encourage future investments toward smelters that produce end products, such as raw materials for electric vehicle batteries or other derived metal goods, thereby ensuring that economic benefits from downstream processing are more widely distributed across domestic industries.
Written by Cora Ji, jiruyan@mysteel.com
