Quota Shortfall and Market Rally: What’s Next for Nickel Industries’ 2026 Outlook?
Nickel Industries has received a significant 60% increase in its 2026 nickel ore sales quota, positioning the company to capitalise on rising nickel prices and ramp up its next-generation processing projects.
- 2026 RKAB quota for Hengjaya Mine increased from 9.0 to 14.3 million wet metric tonnes
- Quota increase reflects strong ESG credentials and outpaces peers’ allocations
- January 2026 Adjusted EBITDA from operations reached approximately US$50 million
- Quota supports supply for both RKEF and ENC HPAL operations
- Company plans further quota applications later in 2026 to support ENC project ramp-up
Significant Quota Increase
Nickel Industries Limited (ASX – NIC) has announced a substantial 60% increase in its 2026 nickel ore sales quota for the Hengjaya Mine, lifting the allocation from 9.0 million to 14.3 million wet metric tonnes. This boost comes amid heightened regulatory scrutiny by the Indonesian Government, which is managing supply across key commodities to balance environmental objectives with market stability.
The increase notably surpasses the quota adjustments granted to many of Nickel Industries’ peers, some of whom received less than 30% of their requested volumes. The company attributes this favourable outcome to its strong environmental, social, and governance (ESG) performance, underscoring Hengjaya Mine’s credentials in sustainable operations.
Operational and Financial Implications
The expanded quota directly supports Nickel Industries’ downstream processing facilities, including its rotary kiln electric furnace (RKEF) operations and the upcoming Excelsior Nickel Cobalt (ENC) high-pressure acid leach (HPAL) project. Up to 6 million wet metric tonnes of saprolite ore will supply the RKEF plants at the Indonesia Morowali Industrial Park (IMIP), while the remaining 8.3 million wet metric tonnes will meet the limonite ore demand for the ENC HPAL operations.
January 2026 results already reflect the positive impact of industry-wide quota reductions, with the company reporting an Adjusted EBITDA from operations of approximately US$50 million. Nickel pig iron (NPI) margins surged by around 150% compared to the previous quarter, and HPAL margins exceeded US$10,000 per tonne, signalling robust profitability as nickel prices rally.
Looking Ahead
While the approved quota falls short of Nickel Industries’ initial target of 19 million wet metric tonnes, the company is optimistic about further increases. It plans to submit additional applications mid-year and towards the end of 2026, aiming to capitalise on the commissioning and ramp-up of the ENC project, which is expected to produce approximately 72,000 tonnes of nickel metal annually.
Managing Director Justin Werner emphasised the company’s strong leverage to sustained higher nickel prices, driven by supply constraints and the ramp-up of new production capacity. This positions Nickel Industries to potentially deliver significant earnings growth throughout 2026, reinforcing its transition towards the electric vehicle battery supply chain and a lower carbon footprint.
As the nickel market continues to tighten under regulatory pressures and evolving demand dynamics, Nickel Industries’ enhanced quota and operational scale could prove pivotal in shaping its competitive edge and shareholder returns.
Bottom Line?
Nickel Industries’ quota boost and rising nickel prices set the stage for a transformative 2026, but future approvals and market volatility remain key watchpoints.
Questions in the middle?
- Will Nickel Industries secure further quota increases later this year to meet ENC project ambitions?
- How sustainable are current nickel price levels amid ongoing regulatory supply constraints?
- What impact will the ramp-up of ENC have on the company’s overall carbon emissions and ESG profile?
