Vale Says Royalty and B40 Press Costs as Nickel Prices Fall

JAKARTA - PT Vale Indonesia Tbk said the increase in royalties and the obligation to use B40 biodiesel put additional pressure on the company's operating costs amid a decline in nickel prices throughout 2025.

President Director of PT Vale Indonesia Tbk Bernardus Irmanto said that nickel prices in 2025 were lower than in previous years, even though the company's production and sales performance remained above the target set.

"The realization of nickel prices throughout 2025 is below what we expected," he said as quoted by ANTARA, Monday, January 19.

He said, the production of matte nickel and ore sales until the end of 2025 exceeded the company's budget, while waiting for the results of the audit.

In terms of cost, Bernardus said the production cost in Sorowako was in the range of US$9,000 per ton.

"There is no policy that is inhibiting," he said.

He added that there were a number of policies that had an impact on operating cost pressures.

According to Bernardus, the cost pressure comes from the increase in royalty rates and the implementation of the B40 policy, which needs to be carefully managed because it is related to the reliability of equipment and operations in the field.

The company, he continued, is trying to keep the margin positive amid the challenges.

Based on the exposure of PT Vale Indonesia Tbk, the company recorded revenue of US$902 million as of November 2025, even though global nickel prices were below expectations.

This achievement was supported by the realization of production and sales which were recorded to exceed the company's budget target.

He added, PT Vale adjusts its operational plan in line with the government's production control policy, including by making gradual adjustments so as not to disrupt medium-term performance.

"We don't need to react in panic," he said after the meeting.

During the meeting, Bernardus also touched on the company's commitment to nickel downstream projects that are currently underway with partners.

According to him, the adaptation to the cost and production policy needs to be discussed continuously so as not to create obstacles in fulfilling the company's long-term commitment.