Summary of Key Points from the Conference Call Industry Overview - The conference call focused on the **energy and materials sector** in **Indonesia**, specifically discussing companies involved in **nickel, cobalt, coal, and energy** [1][7]. Core Insights - The **Indonesian government** aims to raise **nickel prices** by implementing quota cuts, enhancing domestic natural gas availability, and increasing downstream value addition in the mining sector [2][7]. - Mining management expresses concerns regarding potential changes in **tax and royalty structures**, particularly with rising export taxes for **gold and coal** [2][7]. - **Coal exporters** anticipate possible rollbacks in export taxes due to profitability issues for lower-calorific producers [2][7]. - Domestic **nickel producers** are less worried about quota reductions and are focused on resource growth while awaiting policy stability [2][7]. - The **downstream supply chain** in nickel may experience consolidation as smaller operators face profitability challenges and rising costs, particularly for **sulphur** [2][7]. Capacity and Production Insights - **Power constraints** are limiting new aluminum capacity growth in Indonesia. An expected **600kt** of new aluminum capacity is set to start in **Halmahera island**, with **250kt** already in production and **350kt** expected to begin in **August 2026** [3][7]. - An additional **800kt** of new capacity is planned but lacks power supply, which takes **2-2.5 years** to establish new power plants [3][7]. - In **Sulawesi**, **600kt** of capacity is projected to ramp up in **3Q26**, but another **600kt** project also lacks power [3][7]. - The **Weda Bay Industrial Park** in Halmahera has land available for new projects, while the **Morowali Industrial Park** in Sulawesi does not [3][7]. Nickel Ore Quota Insights - The **nickel ore quota** (RKAB) is expected to be low at the start of **2026**, with a market expectation of **250 million tonnes**. However, there is a high likelihood of increased quotas later in the year due to rising ore prices [4][7]. - The granting of RKAB will depend on factors such as operational compliance and previous production, with smaller miners likely to cut more than larger ones [4][7]. - If nickel prices remain above **US$18,000/ton**, some suspended supply from **Australia, New Caledonia, and the Philippines** may return to the market [4][7]. Energy Market Dynamics - The power market in **Java and Sumatra** is well-supplied, but large consumers and smelters are increasingly seeking to produce their own power, primarily from coal [5][7]. - There is a **15% gap** in competitiveness between domestic natural gas and coal-based generation, but efforts to increase domestic natural gas availability are intensifying [6][7]. - Growth in renewable energy capacity is unlikely due to unfavorable economics and incentives [6][7]. - Energy and minerals taxes contributed **10%** to Indonesia's revenues, amounting to **US$17 billion** in **2024** [6][7]. Additional Considerations - The potential for **consolidation** in the nickel supply chain could lead to fewer players in the market, impacting competition and pricing [2][7]. - The focus on **downstream value addition** indicates a strategic shift in the mining sector towards enhancing local processing capabilities [2][7]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the energy and materials sector in Indonesia.