JAKARTA, RAKYAT NEWS – The potential reduction in nickel production has raised significant concerns among smelter business owners in Indonesia. The Ministry of Energy and Mineral Resources (ESDM) is reportedly considering a cut in the nickel ore production quota from 272 million tons to 150 million tons for the upcoming year.

This proposal aims to increase the global price of nickel, which is a vital raw material for battery production.

Although this decision has not yet been finalized, the Indonesian Smelter and Refining Industry Association (AP3I) is keeping a close watch on the developments.

AP3I Secretary-General Haykal Hubeis warns that limiting nickel production could lead to higher operational costs for smelters. With fewer raw materials available for processing, smelters may face rising costs, and their revenues could potentially decrease as a result.

Additionally, Haykal notes that smelter businesses may need to adjust their workforce numbers to manage these higher operational costs. The reduced availability of nickel ore could force businesses to operate less efficiently, further straining their financial stability.

In response to this potential change, Haykal urges the government to consider providing a transition period before implementing any restrictions on production. This would allow smelters, particularly smaller companies, time to adjust to the new production levels. He stressed that smelting businesses vary in capacity and resources, so a transition phase would ensure a smoother adjustment process for all.

While Haykal acknowledges the possible benefits of limiting production, he believes it should be done with caution. Limiting production could stabilize or even raise nickel prices in the global market, which would be beneficial for producers. It could also contribute to extending the life of Indonesia’s nickel mines and help reduce environmental impacts associated with overproduction.