By Bernadette Christina and Wilda Asmarini
JAKARTA (Reuters) – Indonesia’s nickel miners agreed on Monday to stop nickel ore exports immediately, the country’s investment agency chief Bahlil Lahadalia said, after Jakarta last month brought forward a ban on shipments to January 2020 from 2022.
Exports due to be shipped from Indonesia, the world’s biggest nickel ore producer, will be bought by local smelter operators at an international price level, Lahadalia said.
“This agreement was carried out not on the basis of a letter from the government or technical ministry, but a joint agreement,” Lahadalia said. “Where the agreement is carried out by the nickel association with us the government.”
Indonesia’s government in September expedited the ore export ban by two years as part of its efforts to boost expansion of a local smelting industry.
Expectations of the Indonesian ban have pushed nickel
A spokesman at the mining ministry, which issues regulations on ore exports, said he could not immediately comment.
Lahadalia, who was appointed last week by President Joko Widodo in his new cabinet, said nickel companies agreed not to export ore based on “collective awareness” to create added value to Indonesian resource exports by processing them onshore.
Nickel smelters have been having problems buying raw material for their plants since Indonesia announced it was moving forward the ore export ban to January.
China’s Tsingshan, the biggest smelter operator in Indonesia, will cut production by 20% starting in November due to scarcity of ore and as the rainy season begins, to maintain its levels of ore inventory, said a company official in Jakarta.
Alexander Barus, executive director at PT Indonesia Morowali Industrial Park, Indonesia’s largest nickel industrial park -where Tshingshan operates – said smelters in Morowali were ready to buy ore from miners.
“We will buy according to our stockpile capacity and when the specification and prices are suitable,” Barus said after attending the meeting with the investment agency chief.
Meidy Lengkey, secretary general of Indonesian Nickel Miners Association, told Reuters that miners were fine with the export stoppage as long as the government helps to support domestic ore prices.
“We are supportive, but prices given to miners should be fair,” she said.
Miners have complained that local smelters are pricing nickel ore at much lower price compared to those exported.
The mining ministry said they will revise pricing rules to put a floor price for ore.
(Additional reporting Fransiska Nangoy, Ed Davies; Writing by Fransiska Nangoy; Editing by Jan Harvey and David Evans)
