IWIP smelters face severe nickel ore deficit without WBN RKAB revision, Eramet says

Nickel smelters operating in the Indonesia Weda Bay Industrial Park (IWIP), North Maluku, could face a shortage of around 30 million tons of nickel ore this year if the government does not approve a revision to the 2026 work plan and budget (RKAB) of PT Weda Bay Nickel (WBN), according to Eramet Indonesia.

Eramet Indonesia Chief Executive Officer Jerome Baudelet said nickel ore consumption at smelters within the IWIP complex reached 120 million tons in 2025, with WBN supplying around 42 million tons.

However, WBN's approved production quota for 2026 was cut to just 12 million tons from 42 million tons a year earlier, and the quota has already been exhausted.

"If we do not obtain an extension, IWIP's ore consumption is 120 million tons. Last year we supplied 42 million tons. Without an extension, there will be a deficit of 30 million tons from Weda Bay Nickel," Baudelet told reporters on the sidelines of the Indonesia Critical Mineral Conference on Thursday.

He said smelters in the industrial park would be forced to source ore from Sulawesi or import material from the Philippines to cover the shortfall.

According to Baudelet, ore from those sources is more expensive than material supplied by WBN, potentially raising feedstock costs for nickel processors.

Eramet is seeking a revision to WBN's 2026 RKAB that would restore its production quota to around 42 million tons, similar to last year's level. The company expects revisions to be submitted in July, with government approval typically issued between July and September.

Read also: Eramet seeks output quota revision, Weda Bay prepares suspension

Baudelet said WBN has mining capacity of up to 60 million tons annually and would be capable of producing 42 million tons this year if the revised RKAB is approved, although operations would require a ramp up period as the mine is currently under care and maintenance.

"We need to remobilize contractors, so there will be a ramp up process. But we are prepared for that and can increase production quite quickly once we receive the extension," he said.

The government's decision to reduce nickel ore production quotas forms part of a broader effort to support nickel prices. The Energy and Mineral Resources Ministry has lowered the industry's combined 2026 production allocation to 260 million to 270 million tons, down from 320 million tons approved last year.

The policy has raised concerns across the industry over potential supply shortages. Nickel industry forum FINI previously warned that nickel ore imports from the Philippines could double to 30 million tons this year from 15 million tons in 2025 as domestic supply tightens.

FINI estimates Indonesia's nickel smelters will require 340 million to 350 million tons of ore this year, creating a potential domestic supply gap of around 100 million tons if production remains capped at current levels.

Editing by Alexander Ginting