Govt Considers Curbs on Processed Nickel Exports

The Investment Ministry is mulling over plans to ban or restrict the export of processed nickel products with less than 70 percent nickel content. Speaking at a virtual conference on Sept. 17, Investment Minister Bahlil Lahadalia said the government was planning to ban exports of processed products containing 30 to 40 percent nickel to preserve Indonesia’s nickel reserves and develop the downstream mining industry.

Indonesian Nickel Mining Association (APNI) secretary-general Meidy Katrin Lengkey said the regulation would encourage investors to build a domestic industry for finished products. However, she added that the government needed to ensure that regulations were in place to accommodate downstream industry development, adequate infrastructure and demand. “The government must ensure the domestic market is ready to absorb the products,” Meidy told The Jakarta Post on Wednesday.

During the press conference, Bahlil added that nickel products should have at least 70 percent nickel content to be allowed for export. However, he also said that, should a company want to export products containing 30 to 40 percent nickel, he did not rule out the possibility of imposing an export tax instead of a ban. “We are still crafting [the regulation],” he said on Sept. 17.

Indonesia’s processing industry is dominated by products of low nickel content, such as ferronickel and nickel pig iron. The country halted exports of nickel ore in January last year to support downstream supply by pushing mining firms to build smelters and refine the metal ore domestically, so as to export higher-value products. Energy and Mineral Resources Ministry Regulation No. 17/2020, issued on Nov. 11 last year, upholds the nickel ore export ban but allows miners to continue exporting washed bauxite and copper anode slime until June 2023, on the condition they are either building or already working with a smelter.

Bernardus Irmanto, chief financial officer at nickel mining company PT Vale Indonesia, said the export ban had been devised to support the downstream nickel industry and boost investment in nickel processing for products that could be sold on the domestic market, such as stainless steel and electric vehicle (EV) battery materials. However, the government should have taken into account the views of “competent and relevant parties” before enacting the regulation. “Ferronickel and nickel pig iron, which has a low nickel content, would be affected by the regulation,” he told the Post via text message on Wednesday.

As of now, Vale Indonesia produces some nickel matte products that contain 78 percent nickel, well above the 70 percent figure mentioned by the investment minister. Read also: Indonesia to have four new smelters this year as mineral ore export ban nears RHB Sekuritas analyst Andrey Wijaya expected nickel prices to remain at a high level at least until year-end, supported by a projected rise in demand for battery production. “We estimate that the nickel price will be between US$18,500 and $19,000 per ton in 2021 and 2022,” he said.

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