World
After a 71% Quota Cut, Weda Bay Goes on Care and Maintenance
Indonesia's RKAB cut Weda Bay's 2026 ore allowance from 42 million to 12 million wet metric tonnes, sending the Eramet-Tsingshan operation into care and maintenance. Huayou's Huafei plant, which supplies mixed hydroxide precipitate to cathode makers including CATL and BYD, placed 90,000 tonnes of annual precursor capacity on standby May 1.
Indonesia's government slashed the Weda Bay nickel mine's 2026 quota by 71% in February, forcing the operation into care and maintenance this month.
PT Weda Bay Nickel, a joint venture of France's Eramet and China's Tsingshan Holding Group on Halmahera Island, received an initial 2026 RKAB allowance of 12 million wet metric tonnes. The 2025 allocation was 42 million. Of the 12 million, nine million was designated for external ore sales; that allocation ran dry by mid-April.
The Indonesia Weda Bay Industrial Park runs NPI smelters and HPAL processing plants that collectively need more than 100 million tonnes of ore per year. Shanghai Metal Market analysis puts 2026 national smelter demand at 343 million tonnes against a quota ceiling of 270 million, a gap of roughly 73 million tonnes.
Huayou's Huafei HPAL facility at IWIP began placing half its Indonesian MHP capacity on care and maintenance on May 1, citing an 84% surge in sulphur costs. At typical HPAL ore ratios, a plant producing 120,000 tonnes of contained nickel per year requires roughly 12 million wet metric tonnes of ore. WBN's entire 2026 external sales allowance, nine million tonnes, ran out before May.
BASF and Eramet canceled their $2.6 billion Sonic Bay HPAL project in June 2024, citing deteriorating market conditions. It would have produced 60,000 tonnes of nickel and 7,500 tonnes of cobalt annually as mixed hydroxide precipitate.
Eramet is now in talks with Zhejiang Huayou Cobalt over an ore supply agreement for the Huafei plant. Huafei produces MHP that ships to Huayou's Chinese refineries, where it becomes ternary precursor material that Huayou names CATL and BYD among its primary buyers.
The 2026 RKAB cycle forces every Chinese operator on Halmahera to price a risk their investment thesis treated as zero. Jakarta, having banned raw ore exports in 2020 to lock in processing investment, has now extended that logic to the processing quota itself.
PT Weda Bay Nickel has filed for a mid-year quota revision. If the ceiling holds through July, Huafei's 90,000 idled tonnes of MHP stay dark and Huayou's cathode buyers absorb the shortfall with no alternative Indonesian source.