Quota reduced by 70%! World's largest nickel mine hit by Indonesian production limits, LME nickel prices surge in response

During the European trading session on February 11, nickel prices on the London Metal Exchange (LME) surged, with an intraday increase of 2.6%. This movement was directly caused by the Indonesian government's significant quota reduction for the world’s largest nickel mine, PT Weda Bay Nickel.

According to media reports citing informed sources, Weda Bay Nickel's ore production quota for this year will plunge from 42 million tons in 2025 to 12 million tons, a decrease of 71%, far exceeding market expectations. The mine is located on Halmahera Island in North Maluku province, jointly owned by France’s Eramet SA and Indonesia’s PT Aneka Tambang among other companies. The drastic quota reduction will directly impact its original plan to expand production to over 60 million tons, in turn affecting supplies to associated industrial parks relying on this mine.

A spokesperson for Indonesia’s Ministry of Energy and Mineral Resources stated that the relevant quota is still under evaluation. The production restriction measures are expected to have a significant impact on the global nickel supply structure.

Indonesia Steps Up Supply-Side Regulation

As the world’s largest nickel producer, Indonesia is actively adjusting supply to stabilize market prices. The drastic quota cut for Weda Bay Nickel is the latest move by the Indonesian government to boost persistently depressed nickel prices. In recent years, global nickel prices have languished due to continued capacity expansion within Indonesia; this supply tightening at a key mine aims to provide substantial support for prices.

As the world’s largest single nickel mine, changes in Weda Bay Nickel’s production have a significant impact on global supply. The quota slashing from 42 million tons to 12 million tons means the mine’s annual output will shrink considerably, potentially reshaping the global nickel market’s supply-demand dynamics, especially as demand continues to grow in sectors such as electric vehicle batteries.

This move also directly impacts the mine’s own operational and expansion plans. The company previously planned to raise annual production to over 60 million tons to support the smelting capacity of nearby industrial parks. With such a sharp quota reduction, the company and its shareholders will be forced to reassess their investment and production strategies.

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