Nickel miners in Indonesia, the world's top producer, have scaled down production pending new mining quotas approval from the government which prompted smelters to curb production.
Indonesia requires miners to receive a production quota known as an RKAB. However, in anticipation of this year's presidential election and a change in the permits' duration from one year to three years, the miners have experienced delays to quota allocation. Mining has slowed because of the delay, curbing supply, and the price of the main grade of nickel ore in Indonesia has risen, Reuters reports.
Meanwhile, the Energy and Mineral Resources Ministry said that the process of distributing RKAB quotas will be completed by the end of March.
"RKAB approvals for minerals are still on progress and the plan is to complete them by the end of March," Reuters quotes Irwandy Arif, special staff to the energy and mineral resources minister, as saying.
A total of 723 mineral mining companies applied for quota approvals, Irwandy added.
Many Indonesian smelters started slowing operations in January because of lower ore supply expectations and weak seasonal stainless steel demand, and some have cut production further up to 50% in February, according to the smelter sources quoted by Reuters.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
