Indonesia’s evolving approval system and regulatory interventions cast doubt on nickel supply stability in 2026, offering only short-term price support while failing to sustain long-term gains.

Indonesia’s Rencana Kerja & Anggaran Biaya (RKAB), or Mining Work Plan and Budget, is a system that guides and regulates nickel mining companies. It issues operating permits, sets rules for production caps, and ensures environmental and financial compliance. In May 2024, the RKAB validity period shifted from a one-year cycle to three years for projects already in production.

However, beginning in 2026, the RKAB will revert to an annual approval system. Whilst 2026 approvals for miners that applied in 2024 are expected to remain consistent with an earlier total allocation of 240Mwmt, the inconsistency of the production policy will likely add new layers of uncertainty for both miners and investors.

According to the Minister of Investment and Mining, Bahlil Lahadalia, the return to annual approvals aims to strengthen oversight of raw material supply, stabilise prices of coal and nickel ore, and ensure greater state revenue. However, it is worth noting that over the last three years, nickel ore output has consistently been below the RKAB quotas, suggesting that the oversupply in the nickel market has not been the result of quotas being much higher than production; instead, it is a result of weaker-than-expected demand.

It now appears that Indonesia may be increasingly relying on other regulatory tools to manage ore supply and, in effect, attempt to control nickel prices. On 12 September, the Task Force for Forest-Area Enforcement (Satgas PKH) seized control of 148 hectares within PT Weda Bay Nickel’s concession (owned by Tsingshan and Eramet), citing the absence of a required forestry “borrow-to-use” permit (IPPKH). Although the company holds a valid mining licence, this action highlights the government’s willingness to deploy forestry regulations as an additional constraint.

These interventions may lend temporary support to nickel prices by restricting supply. Yet, over the medium to long term, market fundamentals will continue to be shaped less by regulation and progressively more by a potential demand recovery—particularly breakthroughs in next-generation technologies such as solid-state batteries.