A major Chinese-controlled nickel smelter in Indonesia's core nickel-producing region is reducing output due to its tailings pond nearing full capacity, highlighting growing waste management challenges in the nickel industry. According to Arif Perdanakusumah, Chairman of the Indonesian Nickel Smelting Association (FINI), the sector faces mounting pressure as domestic nickel ore supply struggles to keep pace with rapid smelting capacity expansion. Several smelters have even warned of potential shutdowns.
Arif noted that with hundreds of smelters operating nationwide, demand for mining quotas has surged. However, the government has shortened the validity of RKAB mining quotas from three years to one, further tightening domestic supply. The widening gap between mine output and smelting demand, exacerbated by tightening policies and accelerating industrial demand, calls for urgent action.
Arif urged authorities to prioritize RKAB approvals for mines linked to smelters while enhancing exploration and mining technology to prevent structural raw material shortages. He warned that without stronger upstream planning, Indonesia—despite its vast nickel reserves—may become reliant on nickel ore imports, threatening its downstream ambitions in stainless steel and battery materials.
**Related Hong Kong-listed Nickel Stocks:** 1. **LYGEND RESOURCE (02245)**: Originally a nickel ore trader, the company has transformed into a global nickel smelting leader. Its Indonesian smelting projects benefit from 20-year ore supply agreements with partners at government-mandated minimum prices. With both mines and smelters concentrated on Obi Island, it enjoys significant cost advantages in raw materials. Joint ventures ensure stable, low-cost long-term supply.
2. **XINXIN MINING (03833)**: Its wholly owned assets include four nickel-copper mines (Kalatongke, Huangshandong, Huangshan, and Xiangshan) and two vanadium mines (Xianghe Street and Mujia River), plus the Karqiar fluorite mine.
3. **MMG (01208)**: The company announced plans to acquire Anglo American’s nickel operations in Brazil, now under extended EU antitrust review until June 30, 2026.
4. **CNGR (02579)**: A global leader in nickel- and cobalt-based pCAM for lithium-ion batteries, it has ranked first in shipments for five consecutive years since 2020. As of the latest data, it holds majority stakes in three Indonesian laterite nickel mines (51.0%, 48.8%, 46.7%), full ownership of a phosphate mine in China’s Kaiyang, and lithium salt mine interests in Argentina (100% and 49.9%).