Singapore, 22 September (Argus) — The Indonesian Ministry of Energy & Mineral Resources (ESDM) has sanctioned 25 nickel mining companies in southeast Sulawesi province because of a lack of reclamation and post-mining guarantees.
Some mining companies for other products such as coal, gold, iron ore, tin and asphalt have also had their licences suspended. A total of 190 general mining licences were suspended by the ESDM — spanning from central Kalimantan to north Maluku — according to a document released on 18 September. Some nickel mines in north Maluku also received a suspension letter, market sources said.
The sanctions included a temporary suspension of mining activities, which may last up to 60 days. Despite the suspension, the companies are still expected to fulfill their duties, including maintenance, environmental management and monitoring of mining areas.
A series of warning letters were issued in December 2024-August 2025. The sanctions were imposed after the companies have failed to oblige to the warnings, traders said. The sanctions will be lifted once the companies submit a reclamation plan and provide the necessary guarantees.
This is expected to have limited impact on the nickel market given that some of these mines were not active or had “unstable production rates”, according to a market participant.
But it could further boost concerns about nickel ore supply from the country. Class 1 nickel prices on the London Metal Exchange (LME) electronic trading platform are rangebound so far today, with three-month prices up by $9/t and cash prices down by $/t as of 15:20 Singapore time.
The Indonesian government has lately stepped up efforts in managing the mining sector. A taskforce earlier this month seized lands from miners Weda Bay Nickel and Tonia Mitra Sejahtera for lacking forestry permits. Concerns emerged as participants pointed to possible disruptions to nickel ore supply on the back of an increased focus on investigating mining companies. This seizure of land drove LME official prices up by 3pc on 15 September.
