Indonesia Nickel Smelters in Sulawesi — 2026-09-25
This week, a fatal landslide at a Konawe Utara nickel mine killed four workers, while 北京-based media confirmed an El Niño-driven drought is forcing smelters in Sulawesi — including the IMIP hub — to cut production, though no force majeure has been declared. Indonesia's output curbs continue to fail in lifting global prices, and Jakarta is moving to extend processing restrictions beyond the ore export ban.
Indonesia Nickel Smelters in Sulawesi — 2026-09-25
Top developments
Four workers killed in nickel mine landslide in Konawe Utara
Four workers died when buried by a landslide while working at a nickel mine in Konawe Utara, Southeast Sulawesi. Law enforcement is investigating the case. The accident underscores persistent safety risks across the Sulawesi nickel supply chain feeding the region's smelters.
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El Niño drought forces production cuts at major nickel hub; no force majeure declared
Bloomberg reported on September 22 that smelters at a major Indonesian nickel-processing hub will be forced to cut output because El Niño-driven drought is reducing water supply used for cooling and protecting equipment. Bloomberg Technoz added this week that no nickel smelter in Sulawesi has yet formally declared force majeure, despite production declining. For IMIP in Morowali — previously flagged as facing a potential 40% production drop — water scarcity is now a structural supply risk on top of tightened ore quotas.
Production curbs fail to lift prices; market unconvinced
Analysis published September 23 (in an Andy Home column carried by MINING.COM, Mining Weekly and the Jakarta Post) argues that Indonesia — which now accounts for over 60% of global output — is finding that leveraging supply dominance to control prices is much harder than building it. Rising inventories and an unconvincing quota cut (260–270 million wmt for 2026, down from 379 million wmt in 2025) have left markets doubting Jakarta can prevent another surplus year; the International Nickel Study Group revised its 2026 market balance in April but demand headwinds persist.
Nickel prices rebound on Indonesian NPI cuts and IMIP disruption expectations
Shanghai Metals Market reported this week that nickel prices rebounded, supported by Indonesian NPI production cuts and expectations of disruptions at IMIP. The SHFE 2610 contract rose 1.0%, with LME nickel also gaining. The weekly SMM Indonesia NPI FOB Index averaged $135.03 per nickel point, down $2.05 week-on-week, with the decline in NPI prices slowing markedly. This is a modest positive signal for Sulawesi's cost-pressured RKEF/NPI smelters.
Jakarta moves to deepen processing restrictions beyond ore exports
Reporting from September 23 indicates Indonesia is pushing restrictions further into the nickel value chain beyond the raw ore export ban — an escalation of resource nationalism with consequences for global battery supply chains and stainless steel markets. This raises the stakes for existing Sulawesi and Halmahera smelter operators and future HPAL/RKEF investment decisions.
Local view
Bloomberg Technoz's Indonesian-language coverage notes the mood among smelter operators: although El Niño has cut output, smelters across Sulawesi have so far avoided declaring force majeure, signalling they hope to ride out the drought rather than suspend contracts. Kompas's coverage of the Konawe Utara landslide reflects growing local scrutiny of mining safety in Southeast Sulawesi, with the case now under law-enforcement investigation.
Context & numbers
- 2026 nickel RKAB quota: 260–270 million wmt, sharply down from 379 million wmt approved for 2025
- Indonesia now accounts for over 60% of global nickel output
- SMM Indonesia NPI FOB Index: $135.03 per nickel point (down $2.05 w-o-w); SHFE 2610 contract up 1.0%
- A new Columbia Center on Sustainable Investment policy report examines circular economy opportunities for Indonesia's nickel sector, published this week
On the radar
- Watch for any Sulawesi smelter formally declaring force majeure as the El Niño drought persists — so far, none has.
- Follow the investigation into the Konawe Utara mine landslide and any ESDM/ministry response on mining safety enforcement.
- Details of the reported plan to extend processing restrictions beyond ore exports — scope and timing remain unclear.
- Whether the Antam–CATL HPAL project at Buli, East Halmahera (reported entering FID around two weeks ago) confirms construction milestones in the coming weeks — flagged as recently reported, to be verified.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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