Indonesia considers moratorium on new nickel smelters amid oversupply

  Indonesia is considering a moratorium on new semi-finished nickel smelters to curb a global oversupply that has severely depressed commodity prices, Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia said Wednesday.

Bahlil Lahadalia, who also serves as Energy and Mineral Resources Minister, said current global nickel reserves and production capacity have resulted in an oversupply of approximately 2.5 million tons.

"There is an oversupply, which is why prices are falling. We might consider limiting the semi-finished goods industry—or even imposing a moratorium—while prioritizing industries that produce finished downstream products," Bahlil said on the sidelines of the Investor Daily Summit in Jakarta on Wednesday.

Semi-finished products—including ferronickel, nickel pig iron (NPI), nickel matte, and mixed hydroxide precipitate (MHP)—currently account for roughly 50 to 60 percent of national output.

Bahlil explained that the ESDM Ministry is currently evaluating the strategic direction of the national nickel industry to ensure the long-term sustainability of reserves and strengthen the national industrial structure.

According to Bahlil, the government aims to differentiate between facilities that warrant continued development and those whose expansion should be restricted or subjected to a moratorium.

Bahlil said his team is preparing a formal recommendation for President Prabowo Subianto to determine which segments of the sector will face restrictions.

"I believe it is crucial to start determining which industries should continue and which should be subject to a moratorium, so that our management of natural resources does not become reckless," he added.

Going forward, the government intends to shift its focus toward promoting industries capable of producing end-stage downstream products directly, with the aim of driving structural transformation in the national economy.