Indonesia's heavy restrictions on production at the world's largest nickel mine push London nickel prices to near $18,000.

As the Indonesian government is stepping up efforts to boost global nickel prices, the world's largest nickel mine located in Indonesia, Weda Bay Nickel, has been requested to significantly reduce production. According to sources, Weda Bay Nickel has been informed that it will be given a production quota of 12 million tons of ore this year, far lower than the 42 million tons in 2025, a decrease of 71%. In response to this news, as of the time of writing, the LME nickel futures price has risen nearly 2% to $17,888 per ton, marking the fourth consecutive day of gains. Weda Bay Nickel is located on Halmahera Island in North Maluku Province, Indonesia. Weda Bay Nickel declined to comment. French company Eramet SA, which owns shares in the mine, confirmed the scale of the quota reduction in a statement on Wednesday and stated that the company plans to apply for a revision of the quota. A spokesperson for the Indonesian Ministry of Energy and Mineral Resources stated that the quota is still under evaluation. As the world's largest nickel producer, Indonesia is actively regulating supply to stabilize market prices. This significant reduction in the production quota for Weda Bay Nickel ore is the latest measure taken by the Indonesian government to boost the pressured nickel prices. In recent years, the global nickel prices have been in a long-term slump due to the continuous expansion of Indonesia's domestic nickel production capacity. Prior to this production cut, Indonesia's nickel supply had surged to approximately 65% of the global total production, leading to consecutive years of sharp declines in nickel prices. As the world's largest single nickel mine, the production changes at Weda Bay Nickel have a significant impact on global supply. The drastic reduction in the production quota from 42 million tons to 12 million tons implies a substantial contraction in annual output from the mine, which could significantly alter the supply-demand dynamics of the global nickel market, especially amid continued growth in demand in areas such as electric vehicle batteries. At the same time, this move will also have a direct impact on the operations and expansion plans of the mine itself. The mine had previously planned to increase its annual production to over 60 million tons to support the smelting capacity of surrounding industrial zones. Now, with a significant reduction in the quota, the company and its shareholders will have to reassess their investment and production strategies. It is reported that Indonesian authorities have reiterated their plan to significantly reduce nickel production this year. Tri Winarno, the director general of the Indonesian Ministry of Mines and Coal, stated that Indonesia's nickel ore production quota for this year will be between 260 million to 270 million tons. While this target is slightly higher than the market estimate of 250 million to 260 million tons, it is still much lower than the 2025 target of 379 million tons. Indonesia's tightening of nickel supply is expected to have a significant impact on the global nickel supply structure and provide substantial support for nickel prices.