Indonesia’s Nickel Royalty Hike Tests Smelter Margins and Mining Stock Performance
- Diva Alina, Tara Malakiano
- 4 days ago
- 3 min read
Indonesia’s increase in nickel royalties, alongside new rules that shorten the validity period of production quotas, is adding pressure on nickel smelters, while global nickel prices remain near critical cost levels. At the same time, stock market investors are reassessing the outlook for mining stocks such as ANTM, INCO, NCKL, and MBMA.
Since mid-2025, three-month nickel prices on the London Metal Exchange (LME) have largely consolidated in the range of US$ 14,800–16,000 per ton, far below the peak of over US$ 48,000 per ton reached in 2022. A Reuters report from a metals conference in Jakarta in June 2025 noted that industry players expect the global nickel oversupply to persist at least until 2027–2028, driven by capacity expansion—particularly in Indonesia. Meanwhile, demand growth, including from the electric vehicle (EV) battery sector, has shown signs of slowing.
Policy Dynamics: Nickel Royalties and RKAB in 2025
On the policy front, the government issued Government Regulation (PP) No. 19/2025, which changes the nickel ore royalty from a flat 10% rate to a progressive tariff of around 14–19%, depending on the Reference Mineral Price (Harga Mineral Acuan or HMA), as reported by various media outlets and policy documents from Indonesia’s House of Representatives (DPR RI). This regulation was followed by another significant change: the validity period of the Mining Work Plan and Budget (Rancangan Kerja dan Anggaran Biaya or RKAB) was shortened from three years to one year.
These policy adjustments were confirmed in coverage by Reuters and domestic business media, highlighting the government’s objective to tighten production controls and help rebalance the nickel market.
Industry participants argue that the combination of low nickel prices, higher royalty burdens, and uncertainty surrounding production quotas could pressure margins, particularly for producers with higher cost structures. Industry associations and business players have called for a longer transition period, while the government maintains that adjustments to royalties and RKAB are necessary to strengthen state revenues and improve governance in the mining sector.
Key Nickel Mining Stocks
The impact of these policies is reflected in sentiment toward mining companies listed on the Indonesia Stock Exchange (IDX). Shares of PT Aneka Tambang Tbk. (ANTM), PT Vale Indonesia Tbk. (INCO), PT Trimegah Bangun Persada Tbk. / Harita Nickel (NCKL), and PT Merdeka Battery Materials Tbk. (MBMA) sare often used as sector benchmarks whenever news emerges regarding nickel royalties, prices, or production quotas.
Several market commentaries note that companies with more integrated operations—from mining to downstream processing—are considered better cushioned against price volatility and policy changes than pure mining players. Nevertheless, margin pressure remains a key concern amid ongoing oversupply conditions.
For market participants, this phase is widely viewed as a period of selection that tests cost efficiency, balance sheet strength, and each company’s ability to move further down the value chain. Amid commodity price uncertainty and evolving policy dynamics, Indonesian mining stocks remain on the radar of some investors, albeit with a higher risk profile compared with previous years.
Reference:
Verda Nano Setiawan, "RKAB Tambang Diubah Jadi 1 Tahun, ESDM Akhirnya Buka Suara", CNBC Indonesia, 17 Oktober 2025.
Disclaimer: The content is made for educational purposes, not a recommendation to buy or sell a particular stock. PT KAF Sekuritas Indonesia is licensed and supervised by the Financial Services Authority (OJK).