PT QMB’s tailings-related output cuts highlight Indonesia’s escalating HPAL waste-management challenges and threaten GEM’s ability to meet its production target of 120kt Ni in 2025.   

PT QMB New Energy Materials, a majority Chinese-owned high-pressure acid leaching (HPAL) nickel producer, located in Indonesia’s Morowali Industrial Park (IMIP), has reportedly reduced output due to limited tailings storage capacity at the site. The company is now awaiting approval for a new disposal site.

The production curtailment is expected to last until Q1 2026, when a new tailings facility is approved and commissioned.

By the end of 2025, nickel output from the plant is expected to fall by approximately 6kt Ni-in-mixed hydroxide precipitate (MHP), compared to its nameplate capacity of 65ktpy Ni and 6.5ktpy Co-in-MHP, 30ktpy Ni-in-nickel cathode, and 25ktpy Ni-in-nickel sulphate.

GEM, which holds a 63% stake in PT QMB, operates and co-owns four HPALs in Indonesia, with a combined capacity of 150ktpy Ni-in-MHP.

According to GEM’s investor communication, the company’s Indonesian nickel operations shipped 79,916t Ni in the first three quarters of 2025, marking a 151% y-o-y increase. However, achieving its annual production target of 120kt Ni will prove challenging given the tailings management constraints in Q4 2025.

This incident underscores Indonesia’s mounting waste-management challenges, as the country’s rapidly expanding nickel sector faces growing local scrutiny, particularly over HPAL operations. Hydrometallurgical processing of low-grade laterite ores generates 1.5–2 times more waste than nickel matte processing routes.

The large volume of tailings presents a heightened risk in Indonesia’s tropical climate, where the rainy season typically lasts from October to April. In 2025, unusually prolonged rainfall extended into May, contributing to a fatal landslide at PT QMB.

This challenge is anticipated to intensify in 2026, as Indonesia is projected to add almost 500ktpy of Ni and 42ktpy of Co to additional MHP capacity.

Project Blue notes that the scale of this expansion will only occur should the HPAL projects under development be exempted from the Indonesian government’s new policy that restricts approvals for projects producing only intermediate nickel products without downstream integration into stainless steel or battery materials.