On August 6, SMM reported, based on exclusive sources, that a major nickel mine was expected to receive approximately 25 million wmt of additional RKAB quota.
Influenced by SMM's market news, nickel prices reacted swiftly, turning from gains to losses intraday. The news weakened earlier market expectations of continued tightening of Indonesia's nickel ore quotas, dampening short-term nickel price sentiment. In the short term, nickel prices may remain in the doldrums, and the market will still need to watch whether other miners obtain supplementary RKAB approvals and the scale of any subsequent additional quota releases.
On August 7, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) denied that the 25 million wmt additional production quota had been approved. However, SMM believes that the ESDM’s latest clarification does not necessarily mean that subsequent RKAB adjustments will not occur. In Indonesia’s RKAB approval process, market participants may sometimes first see preliminary indications or approval progress at the system level, while the final official approval documents may not yet have been issued. Therefore, a certain time lag may exist between the circulation of market news, system-level indications, internal review progress, and the release of final official documents. In this context, the ESDM’s denial may reflect more that, as of the time of its statement, the final official approval documents had not been issued or publicly confirmed.
According to SMM’s market understanding, since the first week of August, news about the possible increase in the major nickel mine’s quota has been widely circulated among mines, traders, and smelters. This indicates that the market has been paying close attention to the possibility of subsequent RKAB adjustments. However, the final outcome still depends on the Indonesian government’s approval process and the release of official documents.
From a broader perspective, RKAB adjustments remain a key variable in Indonesia’s nickel ore market in H2 2026. Any additional RKAB quotas should not be simply interpreted as a full relaxation of Indonesia’s nickel ore supply policy, but are more likely assessed on a case-by-case basis, depending on downstream demand, smelter raw material requirements, mine compliance, actual capacity, and the government’s policy intent to maintain a supply-demand balance.
This assessment also echoes recent remarks by Bahlil Lahadalia. Bahlil previously mentioned that RKAB relaxation would prioritize enterprises with higher royalty contributions, and that production quota adjustments would be implemented in a relatively prudent manner through RKAB revisions. The government would also avoid directly disclosing the specific scale of revised quotas to prevent unnecessary fluctuations in commodity prices. This further supports SMM’s view that subsequent RKAB revisions remain possible, but the approval process is more likely to involve selective, policy-driven adjustments rather than a blanket relaxation of quotas.
From SMM’s perspective, two scenarios may unfold going forward. First, the RKAB adjustment is eventually approved, and the approved volume is sufficient to cover the raw material needs of relevant smelters, which would help alleviate localized tightness in ore supply and enhance raw material supply security for downstream enterprises. Second, the approval may still be postponed or adjusted, or the final approved volume may fall short of market expectations, contingent on the government’s final review outcome.
Therefore, SMM believes the market still needs to closely monitor the progress of subsequent RKAB adjustments. Given that related news has been widely circulated among mines, traders, and smelters, and that there remains a real need to secure raw material supply for smelters, the likelihood of subsequent RKAB revisions remains relatively high. However, the final approval timing and specific quota scale still depend on the ESDM’s official approval pace and final documents. Before the official approval documents are released, the market should regard the 25 million wmt figure as a potential quota adjustment expectation, rather than a confirmed final quota.
![[SMM Nickel Midday Review] Nickel prices edged up on August 10, while China's July CPI fell 0.1% MoM.](https://imgqn.smm.cn/usercenter/LNpBh20251217171732.jpeg)
