On 2 January 2026, PT Vale Indonesia (PTVI) said it had suspended nickel ore mining operations due to delays in obtaining approval for its 2026 Work Plan and Budget (RKAB), reiterating that mining activity cannot proceed without the permit.

The company said that it does not expect the delay to affect overall operational sustainability and added that it anticipates the 2026 RKAB will be issued in the near term. The announcement supported a late-day lift in nickel prices.

The daily average LME nickel price closed at US$16,765/t on 2 January, and further rose to US$18,450/t on 7 January, marking the highest level since June 2024.

PTVI’s suspension comes as Indonesia considers a significant reduction to its 2026 nickel ore production quota. According to the Indonesian Nickel Miners Association (APNI), the government has proposed an annual nickel ore production target of around 250Mt under the 2026 RKAB, down from 379Mt approved for 2025—an implied cut of approximately 129Mt, or 34%.

Project Blue estimates that Indonesia will require more than 330Mt of nickel ore in 2026 to meet domestic feedstock demand for nickel pig iron (NPI), mixed hydroxide precipitate (MHP) and matte production.

On that basis, a quota of 250Mt would imply an ore shortfall of roughly 80Mt, which would be difficult to bridge through imports. Indonesia’s nickel ore imports are projected at 15Mt in 2025, with 97% sourced from the Philippines.

At the start of 2025, the Indonesian government was also widely rumoured to be considering a significant reduction in the 2025 RKAB quota to support nickel prices. However, the final approved quota ultimately increased, rising from 272Mt in 2024 to 379Mt in 2025.

Against that backdrop, PTVI’s latest operational pause has reinforced market expectations that the government may be more determined to implement tighter RKAB limits in 2026—although the key question remains whether the quota will again be revised upward as approvals are finalised.