In-Depth Analysis of GEM's 150,000 Tons Nickel Capacity Release and Urban Mining Strategy

Based on the data and research materials I have obtained, here is the

:

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Indicator	Data	Significance
Total Nickel Production Capacity	150,000 tons/year (110,000 tons held + 40,000 tons via stake)	Top 3 global MHP nickel capacity
2025 MHP Shipments	Over 110,000 tons	110% year-on-year surge
Capacity Utilization Rate	100% (from July 2025)	Full production operation, expected to continue in 2026
Self-Produced Cobalt Metal	Nearly 10,000 tons/year	Significantly reduces import dependence
Market Share of Ternary Precursors	15%	2nd globally
Market Share of Ultra-Fine Cobalt Powder	50%	1st globally

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At the start of 2026, the global nickel market experienced violent fluctuations:

Time Node	Performance	Trigger
December 17, 2025	Fell below RMB 112,000/ton (multi-year low)	Expectation of oversupply
January 6, 2026	10.5% single-day increase (LME)	Indonesia’s production cut policy signal
January 9, 2026	Touched RMB 149,600/ton	Cumulative increase of nearly 25% over 17 trading days
January 10, 2026	Pulled back to RMB 136,000-140,000/ton	Long positions took profits and exited

points out that 80% of the current nickel price increase comes from policy expectations, while only 20% reflects actual supply and demand changes [1].

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As a “super giant” in global nickel supply, Indonesia’s policy trends affect the entire market:

Policy Key Points	Details	Impact Assessment
Quota Reduction	Reduced from 379 million tons to 250 million tons (-34%)	Expected to reduce supply by 200,000-300,000 tons
Cobalt Taxation	1.5%-2% royalty tax on associated cobalt	Raises the cost floor of nickel products
Base Price Adjustment	Revision of HPM pricing formula	Affects trade pricing mechanism

[2]:

2025: Supply 3.81 million tons vs Demand 3.6 million tons → Surplus of 210,000 tons
2026: Supply 3.8 million tons vs Demand 3.75 million tons → Surplus of 50,000 tons (may shift to tight balance)

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[3]:

Phase	Time	Capacity Utilization Rate	Shipment Volume
Capacity Ramping	January-June 2025	85-90%	Approximately 40,000-50,000 tons
Full Production Operation	From July 2025	100%	Nearly 10,000 tons per month on average
Expected Continuation	2026	100%	Expected to exceed 110,000 tons

:

1. Supply Increment Contribution
   : 110,000 tons of shipments account for approximately 3% of global nickel supply, which can effectively supplement market supply
2. Stable Shipment Capacity
   : Full production operation ensures supply chain stability and reduces price pulses caused by supply disruptions
3. Cost Advantage Support
   : The cost of the HPAL hydrometallurgical process is 15-20% lower than that of pyrometallurgical processes [4], providing better resilience during price downturns

The

adopted by GEM has significant advantages:

Technical Indicator	GEM’s Level	Industry Average	Advantage Margin
Nickel Leaching Rate	≥95.5%	90-92%	+3.5-5.5 pct
Cobalt Leaching Rate	≥95%	88-90%	+5-7 pct
Reactor Volume	1,168 m³ (world’s largest)	600-800 m³	50% increase in single-line capacity
Carbon Emissions	Low (30% lower than pyrometallurgy)	High	Compliant with ESG requirements

According to calculations by industry experts [4]:

• At a nickel price of US$17,000/ton
  : GEM’s smelting profit per ton of nickel resources can reach
  US$5,000
• Cobalt Price Linked Returns
  : In 2025, cobalt prices surged by over 160% (from RMB 169,000 to RMB 447,000/ton), and the coordinated production of nickel and cobalt significantly boosts profits

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GEM’s built “Urban Mining” ecosystem:

┌─────────────────────────────────────────────────────────────────┐
│                Urban Mining Industrial Chain                    │
├─────────────────────────────────────────────────────────────────┤
│  Recycling End → Cascaded Utilization → Dismantling & Regeneration → Material Remanufacturing → New Energy Materials │
│                                                                 │
│  ① Battery Recycling Bins  ② Waste Recycling Supermarkets  ③ Distribution Hubs │
│  ④ Low-Carbon Recycling Plants  ⑤ Urban Mining Industrial Parks │
└─────────────────────────────────────────────────────────────────┘

Indicator	2024	2025	Year-on-Year Growth Rate
Recycling & Dismantling Volume	-	36,000 tons (first three quarters)	+59%
Decommissioned Power Battery Volume	300,000 tons (industry)	820,000 tons (2025 forecast)	+173%
Market Size	RMB 48 billion	Expected to exceed RMB 100 billion by 2030	Double in 5 years

: The Action Plan for Improving the Recycling System for Power Batteries of New Energy Vehicles has been reviewed and approved at the executive meeting of the State Council, ushering the industry into a new stage of standardized development [5].

:

Resource	Traditional Import Dependence	Contribution from Urban Mining	Increase in Self-Sufficiency Rate
Nickel	80%+	150,000 tons/year	Approximately 15-20%
Cobalt	90%+	10,000 tons/year	Approximately 30-35%
Lithium	70%+	Under continuous construction	Expected to be 10%+

GEM has established cooperative relationships with over

, creating business models such as “raw materials for waste, targeted recycling”, and forming a closed business supply loop [6]:

• South Korea’s ECOPRO
  : 10 years of in-depth cooperation, mutual equity investment, and joint establishment of a full industrial chain of “nickel resources - precursors - cathode materials”
• European Market
  : Signed a memorandum of understanding with AE in September 2025 to explore battery recycling opportunities in Europe and the US
• Indonesian Base
  : 60,000 tons of electrowon nickel capacity in the Qingmeibang Park, building an overseas resource supply system

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Dimension	Advantage	Rating
Capacity Scale	150,000 tons of nickel capacity at full production, top 3 globally	★★★★★
Technological Leadership	World-leading HPAL process, leaching rate exceeding 95%	★★★★★
Cost Advantage	15-20% lower than industry average costs	★★★★☆
Resource Recycling	First-mover advantage in urban mining, over 1,000 partners	★★★★★
Cobalt Resources	Nearly 10,000 tons of self-produced cobalt, benefiting from rising cobalt prices	★★★★☆

: GEM’s 110,000 tons of capacity accounts for a small proportion of the global 3.8 million tons of supply, making it difficult to reverse price trends alone

:

• Stable supply capacity can
  smooth out sharp price fluctuations
• Maintains profit resilience through cost advantages during price downturns
• Coordinated production of nickel and cobalt enhances risk resistance

: The urban mining model reduces dependence on imported resources and improves the supply chain safety margin

Risk Type	Details	Response Strategy
Uncertainty of Indonesian Policies	The implementation intensity of quota reduction remains to be observed	Monitor policy implementation effects
Nickel Price Fluctuation Risk	Supply and demand pattern is still in oversupply	Maintain full production + leverage cost advantages
Slowdown in Demand Growth	New energy vehicle demand growth slows to 4.5%	Expand energy storage and 3C markets
Exchange Rate Risk	Increasing proportion of overseas business	Localized production in Indonesia

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The full release of GEM’s 150,000 tons of nickel capacity

, but cannot completely eliminate price fluctuations. Its core value is reflected in:

1. Scale Effect
   : Full production operation provides stable supply, becoming an important force for market supply and demand balance
2. Technological Barrier
   : The HPAL process leads the industry, building a 15-20% cost moat
3. Cobalt Resource Synergy
   : Nearly 10,000 tons of cobalt capacity enables the company to significantly benefit from the rising cobalt price cycle
4. Urban Mining Strategy
   : Fundamentally reduces dependence on imported resources and ensures national critical mineral resource security

Against the backdrop of Indonesia’s production cut policy pushing the nickel price center upward, leading enterprises with

will continue to benefit. With its three profit advantages, GEM is expected to further consolidate its position in industry competition [7].

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[1] 21st Century Business Herald - “Monster” Nickel Returns? Indonesian Policies Disturb Nickel Prices to Ride a “Rollercoaster”

[2] China Metallurgical News - 2026 Nickel Market Set for Changes, Indonesian Policies Become Key to Supply-Demand Disturbances

[3] Sina Finance - Nickel and Cobalt Supply Pattern Changes, GEM’s Indonesian Capacity Release Seizes Industry Dividends

[4] Yangtze River Nickel Industry Network - GEM’s Nickel Business Booms, MHP Shipments Double in 2025

[5] Xinhua News Agency - Market Survey on Power Battery Recycling and Utilization

[6] Securities Times - Lithium Battery Recycling Industry Turns a Corner, Rising Energy Metal Prices Boost “Urban Mining” Value

[7] GEM Announcement - Progress Announcement on the “Dual Improvement of Quality and Returns” Action Plan

[0] Jinling API Data (Corporate Finance, Market Data, Technical Analysis)