QMB New Energy Materials, an Indonesia-based nickel and cobalt joint venture led by China's GEM, has cut production by at least half after safety inspections identified problems with its ore waste storage, three sources with knowledge of the matter said.
The environment ministry in Indonesia, the world's biggest nickel producer, has been inspecting metal plants to ensure they are safely handling waste ore remnants known as tailings.
QMB was forced to suspend almost all production in March after a deadly landslide buried four workers under nickel mine waste.
The joint venture, located in Indonesia Morowali Industrial Park (IMIP) on the island of Sulawesi, processes nickel ore to produce mixed hydroxide precipitate (MHP), an intermediate product containing nickel and cobalt that is used to make rechargeable batteries.
The cutbacks could reduce output by up to 6,000 metric tons of nickel equivalent in December, one source said, adding that reduced output would continue until the first quarter of 2026.
A second source said volumes impacted could increase further going into December.
Both sources declined to be identified as they were not authorised to speak publicly.
QMB has production capacity of 96,000 tons of nickel equivalent per year, or 8,000 tons a month, according to the website of GEM SZSE:002340, which has a 63% stake in the venture.
Indonesia produced 2.2 million tons of nickel equivalent in 2024, according to the United States Geological Survey.
GEM, the Indonesian environment ministry and a spokesperson for IMIP did not immediately respond to requests for comment outside of normal business hours.
QMB was one of the first nickel and cobalt plants using the so-called high-pressure acid leaching (HPAL) process to start operations in Indonesia in 2022.
The other partners in QMB are China's Tsingshan and Brunp, a unit of battery maker CATL SZSE:300750, on 10% each, as well as South Korea's EcoPro KRX:247540 on 9% and Japan's Hanwa TSE:8078 on 8%.
In June, the environment ministry ordered IMIP to make rectifications after finding 12 million tons of illegal tailing deposits.