Indonesian nickel miners urge govt not to bring forward 2022 ore export ban

Tsingshan mine at Indonesian Morowali Industrial Park (IMIP) – Image courtesy of Nickel Mines Ltd

Indonesia’s nickel miners association (APNI) urged the government on Thursday not to bring forward a ban on raw mineral exports from 2022.

The association’s Secretary General Meidy Katrin Lengkey said the group has “indirect” knowledge of a plan to revise the regulation to bring forward the date of enforcement of the ban.

Nickel prices rose almost 5% to a 16-month high on Thursday as fears rippled through the market that major supplier Indonesia could bring forward a ban on exports of nickel ore.

A 2017 mining regulation stated that miners who are currently building smelters are allowed to export unprocessed mineral until January 2022. After that, the government will not allow ore exports.

A mining ministry official Yunus Saefulhak declined to comment.

“Be consistent with the 2022 deadline because people have invested money to build smelters, they have borrowed money with an expectation they can still export until 2022,” Lengkey told reporters. “If it stopped mid-way, many will be stalled.”

Miners rely on their exports revenue to fund their smelter projects, she said.

Indonesia currently has 13 operating nickel smelters with input capacity of 24.52 million tonnes

Lengkey said the ban could be moved forward to this year. She also said the group understands that draft of the revision has been drawn up.

Bambang Gatot Ariyono, director general of mineral and coal at Indonesia’s mining ministry, was asked earlier on Thursday if there was a plan for any change, but told Reuters he did not want to comment on something that is “uncertain.”

Certain existing smelters will benefit if the government moves forward the deadline of the ban, said a nickel mining executive who declined to be named.

“They can control the prices of ores from domestic miners,” the executive said.

Lengkey said domestic smelters are asking for higher grade nickel ores and pay low price for low grade nickel ore, below the government’s benchmark mineral price for nickel.

The miners group, which has 281 members, has requested a meeting with President Joko Widodo to ask the government to regulate the domestic nickel price.

Indonesia currently has 13 operating nickel smelters with input capacity of 24.52 million tonnes. Government data showed that 22 more nickel miners are currently under development with additional capacity of 46.33 million tonnes.

Lengkey said the installed capacity will not be enough to process the country’s ore output.

(By Fransiska Nangoy, Wilda Asmarini and Bernadette Christina Munthe; Editing by Ed Davies, Susan Fenton and Alexandra Hudson)

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