Indonesia approves 152.6mn t of nickel mining quotas

Indonesia's government has approved a total of 152.62mn t nickel mining production quotas, also known as RKAB, so far this year, market participants told Argus.

"Those quotas have so many limitations such as ores for hydrometallurgy and pyrometallurgy, and allocation to different companies within specified regions, which limit the flow of those [approved] ores [given] logistic costs, it seems [like] those ore quotas [are] far below the demand in 2024," a source from an Indonesian nickel pig iron (NPI) producer told Argus.

"What you see are just numbers, and it's not clear whether [they] will ever be mined," a source from another Indonesian NPI producer told Argus. Preference appeared to have been given to state-owned enterprises, said the second source.

Indonesian state-controlled mining firm AnekaTambang's (Antam) aims to produce 20.58mn wet metric tonne (wmt) of nickel ore in 2024, having produced 13.4mn wmt in 2023, said Antam earlier this month. Antam also raised its nickel ore sales target for 2024 to 18.75mn wmt, up by 60pc from previous year's sales, in line with a positive Indonesian nickel outlook.

Nickel ore demand in 2024 is predicted to reach 220mn t based on projected nickel output, according to data compiled by Argus. An expected rise in mixed hydroxide precipitate (MHP) output will drive greater low-grade nickel ore consumption in 2024, while nickel ore content used in NPI smelting gets lower, which will lead to a higher figure for nickel ore consumption in the coming years.

High nickel ore consumption in Indonesia has been repeatedly flagged to be an issue plaguing the country's industry. The secretary general of Indonesian Nickel Miners Association's (APNI) Meidy Katrin Lengkey last year again warned that the country's nickel ore with 1.7pc nickel content and above will not last more than six years under their projected consumption scenario, after bringing up the same issue in 2022.