Indonesia is weighing whether to advance the timeline for a planned ban on exports of mineral ores, the country’s trade minister said a day after nickel prices surged on speculation the Southeast Asian nation will halt shipments, Reuters reports.
President Joko Widodo is gathering input from the Ministry of Energy and Mineral Resources about the impact of banning shipments earlier than 2022, Trade Minister Enggartiasto Lukita told reporters in Jakarta last Friday. No decision has been made and any such plan will require “thoughtful consideration” as it will hurt the country’s exports, he said.
Nickel prices exploded past $16,000 a tonne, as speculation swirled that Indonesia may soon ban ore exports. The minister’s comments were the first time an Indonesian official has confirmed that authorities are considering options for an early ban. The restrictions risk deepening a looming shortage of the metal used in stainless steel and batteries as the country is the top source of mined nickel.
The impact of such a ban — if implemented immediately — would be stark, as Indonesia supplies about 8% of the market’s nickel units via nickel ore exports. If this occurs, the nickel market deficit for the next two years would increase markedly. If it does not, nickel could easily have a rapid 20 per cent downside.
While the government issues export quotas to miners with firm commitments to build smelters, it has said it will revoke the permits of companies failing to meet construction targets set out by the ministry. Lukita said an early ban may accelerate construction of downstream industry, including smelters.
In the meantime, the Indonesian Nickel Miners Association has called for consistency in the nation’s exports policy as a lot of investment has gone into developing mines. “We want the government to be consistent and not change the policy,” said Meidy Katrin Lengkey, the association’s secretary general.
This is not the first time that Indonesia has flip-flopped on its mineral exports policy. The government imposed a blanket ban on shipments of mineral ores in 2014 only to relax it in 2017, allowing overseas sale of surplus ore containing less than 1.7% nickel.