Indonesia is set to increase the benchmark price for nickel ore, a move that will intensify cost pressures on local processors already grappling with the economic fallout from the Middle East conflict. According to a report from the country's Ministry of Energy and Mineral Resources, a new pricing formula will take effect, leading to higher minimum prices for all grades of nickel ore. The cost of by-product metals contained in the ore, including cobalt, will also be factored into the new benchmark price. The government had previously announced its intention to adjust the pricing mechanism. Faced with growing fiscal pressures partly due to rising oil prices linked to the conflict, the resource-rich nation has been seeking avenues to boost state revenue. This adjustment is expected to impact the country's extensive processing industry, which is the largest globally and accounts for over half of the world's nickel production. While stricter mining quotas have already pushed high-grade nickel ore prices significantly above the government benchmark, the price increases for low-grade ore could be more pronounced. This lower-grade material is typically purchased by high-pressure acid leach plants to be processed into nickel for electric vehicle battery manufacturers. These smelters are already contending with a sharp rise in the cost of sulfur, a key reagent, due to supply disruptions in the Persian Gulf caused by the conflict. The Indonesian benchmark price sets the minimum price smelters must pay miners for ore. These prices are variable, adjusted twice monthly based on prices on the London Metal Exchange.