Indonesian nickel miners to stop ore exports immediately
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[October 28, 2019] 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 <CMNI3> prices on
the London Metal Exchange (LME) up nearly 40% to around $17,000 a tonne
now. In September, they hit a five-year high of $18,850 a tonne.
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.
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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)
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