Vale Indonesia Profits Surge 313% as Nickel Ore Sales Rocket and Cash Discipline Tightens

JAKARTA, Investortrust.id — Indonesian nickel mining heavyweight PT Vale Indonesia Tbk (INCO) delivered a blockbuster first-half performance, quadrupling its net profit as soaring nickel ore sales and rigorous cost discipline expanded operating margins.

The miner—partially owned by state mining giant MIND ID and global resource leader Vale SA—posted a first-half net profit of $104 million, marking a 313% year-on-year surge that tracks directly in line with market expectations by capturing 50% of full-year consensus targets.

Vale Indonesia's explosive profit expansion highlights how major miners are navigating shifting global supply dynamics by scaling raw nickel ore sales alongside traditional processed nickel matte. For foreign investors tracking the global electric vehicle and battery metals ecosystem, INCO's strengthening operational foundations and strict cash cost discipline demonstrate how top-tier producers remain highly profitable even as geopolitical energy costs fluctuate.

Margin Expansion Fueled by Ore Sales Rocket

Consolidated revenue reached $543 million in the first six months of 2026, up 27% year-on-year, while total cost of goods sold contracted by 1% over the same period.

The resulting operational leverage drove gross profit margins to 28% compared to just 7.1% in H1 2025, pushing operating profit margins up to 19.2%.

The revenue growth was anchored by a massive expansion in nickel ore sales, which generated $142 million—representing 26% of total revenues—up from just $5 million in the prior-year period.

The surge in ore revenue easily offset a 5% drop in nickel matte revenues, which experienced a 21% decline in sales volume to 27,659 metric tons despite average selling prices rising 21% to $14,491 per metric ton.

In the second quarter alone, net profit jumped 39% quarter-on-quarter to $61 million, supported by positive inventory value adjustments totaling $89 million across the first half.

Strengthening Foundations and Cost Discipline

Operational metrics improved heading into the second half of the year, backed by the on-schedule completion of the Furnace 3 rebuild project in June 2026.

The completion eliminates production bottlenecks for nickel matte, positioning the miner to meet its full-year output target of 67,645 metric tons.

At the same time, cash costs at the Pomalaa mining block tumbled to $7 per ton in Q2 from $13 per ton in Q1, driven by higher production volumes and economies of scale.

Management also reined in nickel matte cash costs to $10,005 per ton in Q2, successfully absorbing double-digit quarter-on-quarter price hikes in heavy fuel oil, diesel, and coal.

RKAB Approvals Hold Key to Second-Half Outlook

Looking into the remainder of the year, market analysts emphasize that the company's full-year outlook depends heavily on regulatory approvals for revised Work Plan and Budget (RKAB) production quotas.

Currently, government-approved RKAB quotas for the key Pomalaa and Bahodopi blocks stand at only 30% of requested volumes.

"We maintain our positive view on INCO since 1Q26, which is now confirmed by 1H26 net profit reaching 50% of consensus estimates and nickel matte cash costs returning toward management targets," Stockbit Investment Analyst Theodorus Melvin noted in a research report published Friday, July 31, 2026.

Analyst coverage also pointed to upside potential as national nickel ore quota tightening helps rebalance global nickel supply, while warning that failure to secure revised RKAB quotas remains the primary downside risk to production and sales volumes.