Bahlil confirms plans to cut nickel, coal output in 2026 to support prices

Minister of Energy and Mineral Resources Bahlil Lahadalia has confirmed plans to reduce the country’s nickel and coal production in 2026 as part of efforts to stabilise commodity prices by better managing supply and demand.

 “We are cutting everything. Not only nickel, but coal as well,” Bahlil told reporters on Friday (Dec 19, 2025). “Why? Because we want to regulate supply and demand.”

Bahlil said the ministry has yet to finalise production targets for nickel and coal next year, as calculations are still underway to determine appropriate adjustments to mining output. He said the production cuts are aimed at supporting commodity prices going forward.

Indonesia’s coal production capacity currently stands at around 500 million to 600 million tonnes per year, while global coal supply is estimated at about 1.3 billion tonnes, Bahlil said. He added that Indonesia’s coal output has recently put pressure on global coal prices.

 “So we will regulate it. What is the goal? Businesses must obtain good prices, and the state must also receive good revenue,” he said.

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Nickel production

Indonesia is likely to reduce its nickel ore production quota under the 2026 Work Plan and Budget (RKAB), a move that could tighten domestic supply and increase ore imports by smelters, according to the Indonesian Nickel Miners Association (APNI).

APNI said proposed nickel ore production under the 2026 RKAB stands at around 250 million tonnes, sharply lower than the 379 million tonnes targeted under the 2025 RKAB.

APNI Secretary General Meidy Katrin Lengkey said the lower production plan was intended to prevent further declines in nickel prices.

 “That is the government’s plan — nickel ore production of 250 million tonnes in the 2026 RKAB,” Meidy said on Tuesday (Dec 16, 2025). “It is still a plan, though. I don’t yet know how the actual realisation will be.”

Following the planned production cuts, APNI expects saprolite nickel prices to rise to around US$25 per tonne in 2026, while limonite prices are forecast to increase to between US$30 and US$40 per tonne.

 “Saprolite is expected to rise to US$25. Limonite could increase to US$30–US$40,” Meidy said.

According to APNI data as of Dec 15, 2025, the average price of limonite nickel ore stood at US$22.5 per tonne, while saprolite averaged US$51.9 per tonne.

Meidy added that the government also plans to revise the nickel mineral benchmark price (HPM) formula, alongside the production cuts, to help strengthen domestic nickel ore prices.

 “I cannot disclose the formula yet, as it remains confidential between us and the Directorate General of Minerals and Coal,” she said.

Editing by Reiner Simnajuntak