Indonesia is the monkey wrenchIt's being reported that its mining ministry is considering curtailing the production quotas for nickel.
Indonesia's overproduction has been responsible for the weakness in the price of nickel.
The quotas until now have been set on an annual basis. The ministry wants to extend it out to a period of three years. Supposedly, that would be less of a hassle for the mining companies.
My suspicion is that entities that produce and refine nickel are putting the pressure on to reduce production to firm up the price.
And, extending to three years would take away the yearly threat of raising quotas.
Seems as though it would benefit the nickel industry overall.
It should be a no brainer.
It could be unfortunate that the quotas are already in place for '24. That would make it more difficult for companies like BHP to decide about near term plans like whether to mothball the Kalgoorlie refinery.
Perhaps if a decision is made to reduce the quotas, BHP could eat the loses for another year and keep the plant open.
Be nice if that happens.