How Merdeka Battery Powered an 830% Profit Surge as Downstream Nickel Pays Off
Key Takeaways
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JAKARTA, Investortrust.id — PT Merdeka Battery Materials Tbk (MBMA), the Jakarta-listed nickel mining and processing affiliate of Indonesian natural resources group Merdeka Copper Gold, delivered an explosive bottom-line performance during the first half of 2026.
Net profit attributable to the parent company leapt approximately 830% year-on-year to $54 million, compared to $6 million during the corresponding six-month period of 2025.
Top-line revenue advanced 67% to $1.05 billion, while earnings before interest, taxes, depreciation, and amortization (EBITDA) expanded 306% to $311 million.
As global automakers recalibrate their battery chemistry supply lines, Indonesia’s multi-billion-dollar downstream mineral strategy is transitioning from basic smelting to advanced chemical refining. MBMA's earnings acceleration demonstrates how domestic producers are capturing superior margins by integrating raw extraction directly with high-grade intermediate materials like Mixed Hydroxide Precipitate (MHP)—a key precursor for electric vehicle batteries. By combining scale, operational reliability, and revised domestic mineral price benchmarks, the group is insulating its margins against global base-metal market volatility.
Integrated Operations Drive Operating Margins
Management attributed the outsized financial turnaround to expanding contributions across its core operational basket: nickel ore extraction, nickel pig iron (NPI), and high-grade nickel matte (HGNM).
Stronger shipment volumes were complemented by the government's updated mineral benchmark price (HPM) formula for nickel ore, which improved realized sales prices. Supplementary revenue also flowed from industrial acid sales generated by the acid, iron, and metal (AIM) operations operated by PT Merdeka Tsingshan Indonesia.
"First-half 2026 performance mirrors disciplined operational execution across MBMA’s integrated nickel assets," Teddy Oetomo, President Director of PT Merdeka Battery Materials Tbk, said in an official statement released on Saturday, Sept. 26, 2026. "Expanding extraction volumes paired with superior processing efficiencies significantly lifted group profitability."
Upstream Extraction and Smelting Gains
On the production ledger, upstream ore extraction jumped 121% year-on-year to 15.2 million wet metric tons (16.76 million short tons) in the first half of 2026, up from 6.9 million wet metric tons (7.61 million short tons) a year earlier.
Total ore shipments rose 60% to 12.4 million wet metric tons (13.67 million short tons), comprising 8.2 million wet metric tons (9.04 million short tons) of lower-grade limonite ore and 4.2 million wet metric tons (4.63 million short tons) of saprolite ore.
Downstream processing facilities also operated with higher stability. NPI output and sales grew 20% year-on-year, aided by the completion of scheduled furnace overhauls in 2025 that stabilized thermal operations. Concurrently, production of high-grade nickel matte more than doubled over the same period, providing higher-value processed products to export markets.
Scaling the EV Battery Material Pipeline
The operational backbone built around upstream mining and baseline smelting is providing the launchpad for MBMA’s higher-value battery materials division.
Operating subsidiary PT ESG New Energy Material resumed its production ramp-up of Mixed Hydroxide Precipitate after completing planned maintenance shutdowns and finalizing a transition to a new dry-stack tailings storage facility. MHP serves as an indispensable intermediate feedstock containing refined nickel and cobalt, required to manufacture cathode active materials for lithium-ion battery packs.
Concurrently, development is advancing at affiliate PT Sulawesi Nickel Cobalt (SLNC), which is currently undergoing multi-stage commercial commissioning. The commissioning scope encompasses circuit energization, ore haulage logistics, and primary feed trials into processing autoclaves. SLNC is scheduled to commence commercial extraction during the second half of 2026 before ramping toward full design run rates by the close of the year.
While management affirmed full-year operational guidance, company executives noted they are closely tracking operational variable costs, particularly broader fuel price fluctuations and on-site energy consumption across mining concessions and remote smelter complexes.