Quota reduced by 70%! The world's largest nickel mine faces production restrictions in Indonesia, causing a sharp surge in London nickel prices during trading.

On February 11th during the European trading session, London Metal Exchange (LME) nickel prices surged intraday, with an increase of up to 2.6%. The market movement was directly driven by the Indonesian government’s significant quota reduction for the world’s largest nickel mine, Weda Bay Nickel (PT Weda Bay Nickel).

According to media reports citing informed sources, Weda Bay Nickel’s ore production quota will plummet from 42 million tons in 2025 to 12 million tons, a decrease of 71%, far exceeding market expectations. The mine is located on Hamahera Island in North Maluku Province and is jointly owned by French company Eramet SA and Indonesian company PT Aneka Tambang. This substantial quota cut will directly impact its planned expansion beyond 60 million tons, thereby affecting the supply of related industrial parks that rely on this mine.

An Indonesian Ministry of Energy and Mineral Resources spokesperson stated that the relevant quotas are still under assessment. This production restriction is expected to have a significant impact on the global nickel supply structure.

Indonesia Tightens Supply-Side Controls

As the world’s largest nickel producer, Indonesia is actively regulating supply to stabilize its market prices. The recent drastic reduction in Weda Bay Nickel’s quota is the latest measure by the Indonesian government to boost nickel prices, which have been under persistent pressure. In recent years, due to continuous expansion of domestic capacity, global nickel prices have remained subdued. The supply tightening at key mines aims to provide substantial price support.

As the largest single nickel mine globally, changes in Weda Bay Nickel’s output have a significant impact on global supply. The quota drop from 42 million tons to 12 million tons means the mine’s annual production will be greatly reduced, potentially altering the global nickel market’s supply and demand landscape, especially amid the ongoing growth in demand for electric vehicle batteries.

This move also directly impacts the mine’s operational and expansion plans. The company had previously planned to increase annual production to over 60 million tons to support smelting capacity in surrounding industrial parks. Now, with the quota sharply reduced, the company and its shareholders will have to reassess their investment and production strategies.

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