The Indonesian government is projecting a full-year nickel ore production quota of 250-260 million tons for 2026, a significant decrease compared to the 2025 quota. The President of Indonesia stated that the national asset management agency currently oversees 1,044 state-owned enterprises, with plans to reduce this number to a maximum of approximately 300 in the future. In April 2025, the government adjusted the nickel ore benchmark price tax calculation method from a fixed 10% to a floating range of 14%-19%; in August, the government changed the RKAB quota approval process from a three-year review to an annual review; in November, the government issued a decree strictly controlling the construction of new pyrometallurgical nickel smelting capacity and specified fines of up to 6.5 billion Indonesian rupiah per hectare for nickel mines operating illegally in forest areas. In December, the Indonesian Nickel Mining Association indicated that the Ministry of Energy and Mineral Resources plans to impose a royalty tax of 1.5%-2% on cobalt.
These policies collectively raise the barriers to entry and operational costs for nickel mining, reflecting the Indonesian government's increasingly stringent control over its nickel resources. CITIC Securities predicts that if the 2026 Indonesian nickel ore production quota is implemented, it could lead to a decline in Indonesia's nickel output to 2.6-2.7 million tons, creating a global nickel supply deficit of 200,000 tons and potentially driving LME nickel prices up to $22,000 per ton. In the long term, as Indonesia's regulatory stance on the mining sector becomes progressively stricter, the growth rate of nickel ore production is expected to slow, allowing nickel prices to gradually recover from their lows.
Fluctuations in nickel prices impact related Hong Kong-listed companies: LYGEND RESOURCE (02245) announced that it has submitted application materials, including a draft A-share prospectus, to the Shenzhen Stock Exchange for its proposed A-share issuance and received a notice of acceptance from the exchange on December 31, 2025. It is reported that LYGEND RESOURCE currently covers the entire industry chain, including nickel ore trading, smelting production, equipment manufacturing, and sales.
CNGR (02579) recently stated on an interactive platform that, based on its industrial integration strategy, the company has made strategic investments in upstream nickel, phosphorus, and lithium resources globally since 2022, having acquired resources such as Indonesian laterite nickel ore, Argentine lithium salt lakes, and Guizhou phosphate mines. Soochow Securities estimates the company could achieve self-supply of 30,000 tons of nickel metal on an equity basis in 2026, with a self-sufficiency ratio exceeding 25%, potentially boosting profits by 200-300 million yuan; furthermore, an increase in nickel metal prices would provide significant earnings flexibility. CNGR also recently mentioned during institutional research meetings that it has business collaborations with leading domestic and international solid-state battery customers, with current shipments of solid-state battery materials nearing 50 tons. The vast majority of precursors for solid-state batteries use high-nickel or ultra-high-nickel materials, for which CNGR's products are well-suited.
Public information shows that XINXIN MINING (03833) wholly owns four nickel-copper mines (Kalatongke, Huangshandong, Huangshan, and Xiangshan) and two vanadium mines (Xianghe Street and Mujiahe) through its subsidiaries, in addition to the Kaerqiaer fluorite mine.