Indonesia is shrinking its own nickel supply. On purpose.

The country that mines most of the world's nickel cut its quotas, idled the biggest mine on Earth for four months and has now moved on its top ore trader.

Nickel goes into stainless steel and rechargeable batteries, and Indonesia mines about 60 percent of the world's supply. It mined so much that prices fell more than 40 percent in 2023 and hit a four-year low of around $13,900 a tonne in late 2025. Its energy minister, Bahlil Lahadalia, said on November 5 that prices are poor because of our production.

On November 4, Indonesia's forest task force took over all the land tied to Arif Kurniawan, a former Glencore trader who became the country's top nickel ore trader. A Bloomberg survey put his share at about a third of Indonesia's ore trade in 2024. The next day, three-month nickel on the London Metal Exchange rose 3.8 percent to $16,375 a tonne, its strongest since September 25, as traders worried about shortages.

Every Indonesian mine needs an annual work plan, called the RKAB, that caps how much ore it may dig. The government cut 2026 quotas by around 40 percent at the start of the year, to stop a price collapse it blamed on oversupply. Weda Bay, the largest nickel mine on Earth, owned by Tsingshan, Eramet and state miner Antam, was allowed 12 million tonnes after producing 42 million in 2025. It ran out by early June and did not restart until September 10.

The task force says it found signs of illegal forest use and problems with mining permits. It can reclaim land, fine companies, recover assets and refer any crime to prosecutors. It has not named the companies, the area of land or the commodities involved, and no criminal finding has been announced.

By the minister's own estimate, the world uses about 3.5 million tonnes of nickel a year and is oversupplied by nearly 800,000 tonnes. The energy ministry says 2027 quotas could be cut further, and Chinese producers Huayou and Tsingshan are reportedly weighing cuts of up to 50 percent.

This is not a shortage. It is a producer large enough to set the supply deciding to put less of it on the market. The task force's stated case is about forests and permits, but its effect landed on the same price the quota cuts are aimed at, which is why traders moved within a day. If nickel stays above $16,000 and the 2027 quotas come in lower, the price is being steered from Jakarta. If it slides back, the 800,000 tonne surplus is still doing the steering.