Nickel market faces upheaval as Indonesia and the Philippines consider major policy shifts
The global nickel market is facing new turmoil, with the world’s two top producers considering significant financial and production changes.
Indonesia is proposing major cuts to nickel mining quotas and considering raising royalties paid by mining companies.
Meanwhile, the Philippines – currently second to Indonesia in annual nickel production – is proposing an ore export ban.
Leading nickel producer
Indonesia produced an estimated 2.2 million metric tonnes of nickel in 2024, making it the leading global producer with over 50% of the world’s nickel mine production.
The Indonesian government’s proposed nickel mining quota cuts will potentially lower the amount of ore mined from 272 million tonnes in 2024 to as little as 150Mt in 2025.
At the same time, officials are proposing raising the royalty rates paid by miners and producers of metal products, as well as introducing rates of between 14% and 19% for nickel.
Chinese backing
The China-backed ramp-up of Indonesian production has significantly impacted global nickel markets—particularly in Australia, where a number of projects have stalled.
The Indonesian government has said it aims to support nickel prices, which have been declining due to increased supply and weakening demand from battery makers and the stainless steel industry.
Analysts estimate that the move could cut global nickel supply by as much as 35%.
Philippines export ban
Philippine lawmakers introduced a bill in February to ban raw nickel ore exports, aiming to encourage domestic value-added processing and replicate neighbouring Indonesia’s success in downstreaming its nickel resources.
However, the powerful Philippines Nickel Industry Association (PNIA) says the move has been made at the wrong time.
PNIA has urged the government to reconsider the ore export ban, stressing that the country must first create a competitive environment to attract investments in value-added processing before implementing restrictive policies.
It has also called for swift action to seize global nickel opportunities, highlighting that the country risks falling behind as competitors ramp up production and attract foreign investments.