World’s biggest nickel mine in Indonesia told to cut output

Published Wed, Feb 11, 2026 · 09:13 PM

[SINGAPORE] The world’s biggest nickel mine in Indonesia has been told to slash output, as authorities step up efforts to boost the global prices of the battery metal.

Weda Bay Nickel has been notified that it will receive a quota of 12 million tonnes of ore production this year, down from 42 million tonnes in 2025, sources said. Nickel futures jumped in London following the news.

The mine on the island of Halmahera, North Maluku province, is owned by Tsingshan Holding Group, France’s Eramet and Aneka Tambang.

In a statement on Wednesday (Feb 11), Eramet confirmed the size of the reduction in Weda Bay Nickel’s quota, and said that the company intends to apply for a revision.

Indonesia has been taking drastic steps to revive the prices of its biggest export commodity, largely through scaling back the volumes that key miners are allowed to produce.

Ahead of the latest round of cutbacks, the supply from the country had surged to about 65 per cent of world production, sending prices into a two-year plunge that shuttered rivals in Australia and New Caledonia.

The country is taking similar steps in thermal coal, with the mining quota of the world’s biggest exporter set to be cut to nearly a quarter from the year before.

The Indonesian Coal Mining Association said that the measures may force some operations to shut, while overseas buyers could be left to scramble for alternative sources of the fossil fuel.

The authorities control miners’ output through the issue of annual permits. The proposed full-year volumes can be adjusted at the mid-year mark, meaning that the eventual amounts produced can differ from the initial figures.

Nickel climbed in January after Indonesia flagged plans to cut mine output to about 260 million tonnes of ore this year, down from a 2025 target of 379 million tonnes, although the actual supply last year would have been lower than that figure.

The metal is used in both stainless steel and electric-vehicle batteries, but the demand from the latter has disappointed due to switching to non-nickel chemistries.

Benchmark three-month futures rose as much as 2.8 per cent to US$17,980 a tonne on the London Metal Exchange, and traded at US$17,885 at 9.01 am in London. Eramet shares fell by as much as 5.7 per cent.

The cut to Weda Bay Nickel’s output will be severe for the company, which originally had plans to expand production to more than 60 million tonnes of ore, to support a massive nearby industrial park.

Instead, the site has been forced to import large amounts of the ore from the Philippines due to a lack of local supply.

A spokesperson for Indonesia’s Energy and Mineral Resources Ministry said that the quotas were still being evaluated, while a representative for Weda Bay Nickel did not respond to a request for comment.

In addition, Tsingshan and Aneka Tambang did not respond to requests for comment.

Weda Bay Nickel is still facing a penalty for a breach of its forestry permit, which saw the government take control of 148 hectares at the site. The fine could be about three trillion rupiah (S$225.7 million), it was reported in January. BLOOMBERG