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Indonesia ban on nickel ore, bauxite exports to stay-officials

Industry News 04:54:31PM Aug 11, 2014 Source:SMM
Mon, 11 Aug 08:32:00 GMT
 
By Fergus Jensen
 
JAKARTA, Aug 11 (Reuters) - Indonesia has no plans to wind back a seven-month old ban on exports of unprocessed nickel ore and bauxite that has led to billions of dollars in planned investments in smelters, top government officials said.
 
Indonesia - previously the world's top exporter of nickel ore and a major bauxite producer - effectively halted all but processed metal shipments in January in an effort to force miners to build smelters, winning the country bigger returns from exports of its mineral resources.
 
Last month the government allowed a handful of firms producing partially processed minerals such as copper concentrate, including Freeport McMoRan Inc , to resume exports.
 
However, Indonesia's chief economic minister Chairul Tanjung said the same rationale does not apply to unprocessed exports of nickel ore and bauxite.
 
"Nickel is different because if you are smelting in Indonesia the added value is much higher than copper," Tanjung told Reuters in a recent interview. "Because of that it's a separate issue."
 
The government also lacks the power to intervene on nickel and bauxite as the ban stemmed from a law passed by parliament in 2009, Tanjung said.
 
"There is no way for us to go against the law. The president could be impeached by parliament if we breach the law," he said.
 
The January ban took a chunk out of Indonesia's export revenues just as the country was grappling with a sizable trade deficit. It also put thousands out of work as mines shut, damaging the country's attractiveness for investment.
 
However, Tanjung pointed to recent data from the country's investment coordinating board that showed close to $8 billion was being spent to build three alumina refineries and two ferronickel projects.
 
"This is creating investment in Indonesia," he said.
 
More projects were expected to follow, Tanjung said, which would help reduce the country's trade and current account deficits.
 
Indonesia's Coal and Minerals Director General Sukhyar, who will remain in his current post under Indonesia's incoming administration following last month's election, said mining companies had been given five years notice of the changes.
 
Nickel pig iron smelters could be built for as little as $10 million, Sukhyar, who goes by one name, told Reuters.
 
There were currently 102 nickel smelter projects at various stages of development. "It's very promising," he said.
 
Sukhyar also said the government was monitoring the impact of its processing policy on commodity prices. A government study had found that nickel priced at around $18,000 per tonne was ideal for the industry.
 
Nickel prices rose from levels below $15,000 a tonne before the Indonesia ban, and are currently trading at just below $18,500 a tonne.
 
 
Smelter projects by commodity^
 
(past feasibility study stage)
 
Commodity Projects
 
Nickel 30
 
Bauxite 5
 
Iron 7
 
Manganese 3
 
Zirconia 13
 
Lead and zinc 2
 
Zeolite and 4
 
Kaolinite
 
Total 64
 
 
Smelter projects according to stage of development^
 
Progress Stage Licenses*
 
(percent)
 
0-5 Feasibility Study 102
 
6-10 Environmental 14
 
Impact Assesment
 
11-30 Groundbreaking and 12
 
early construction
 
31-50 Middle stage of 21
 
construction
 
51-80 Final stage of 4
 
construction
 
81-100 Commissioning/ 25
 
Production
 
 
^Data compiled by Energy and Mineral Resources Ministry, July 2014. Excludes copper processing facilities.
 
 
(Additional reporting by Randy Fabi and Wilda Asmarini; Editing by Richard Pullin)
 
((fergus.jensen@thomsonreuters.com; +62 21 2992 7604; Reuters Messaging: fergus.jensen.thomsonreuters.com@reuters.net))
 
Keywords: INDONESIA METALS/EXPORTS

Indonesia ban on nickel ore, bauxite exports to stay-officials

Industry News 04:54:31PM Aug 11, 2014 Source:SMM
Mon, 11 Aug 08:32:00 GMT
 
By Fergus Jensen
 
JAKARTA, Aug 11 (Reuters) - Indonesia has no plans to wind back a seven-month old ban on exports of unprocessed nickel ore and bauxite that has led to billions of dollars in planned investments in smelters, top government officials said.
 
Indonesia - previously the world's top exporter of nickel ore and a major bauxite producer - effectively halted all but processed metal shipments in January in an effort to force miners to build smelters, winning the country bigger returns from exports of its mineral resources.
 
Last month the government allowed a handful of firms producing partially processed minerals such as copper concentrate, including Freeport McMoRan Inc , to resume exports.
 
However, Indonesia's chief economic minister Chairul Tanjung said the same rationale does not apply to unprocessed exports of nickel ore and bauxite.
 
"Nickel is different because if you are smelting in Indonesia the added value is much higher than copper," Tanjung told Reuters in a recent interview. "Because of that it's a separate issue."
 
The government also lacks the power to intervene on nickel and bauxite as the ban stemmed from a law passed by parliament in 2009, Tanjung said.
 
"There is no way for us to go against the law. The president could be impeached by parliament if we breach the law," he said.
 
The January ban took a chunk out of Indonesia's export revenues just as the country was grappling with a sizable trade deficit. It also put thousands out of work as mines shut, damaging the country's attractiveness for investment.
 
However, Tanjung pointed to recent data from the country's investment coordinating board that showed close to $8 billion was being spent to build three alumina refineries and two ferronickel projects.
 
"This is creating investment in Indonesia," he said.
 
More projects were expected to follow, Tanjung said, which would help reduce the country's trade and current account deficits.
 
Indonesia's Coal and Minerals Director General Sukhyar, who will remain in his current post under Indonesia's incoming administration following last month's election, said mining companies had been given five years notice of the changes.
 
Nickel pig iron smelters could be built for as little as $10 million, Sukhyar, who goes by one name, told Reuters.
 
There were currently 102 nickel smelter projects at various stages of development. "It's very promising," he said.
 
Sukhyar also said the government was monitoring the impact of its processing policy on commodity prices. A government study had found that nickel priced at around $18,000 per tonne was ideal for the industry.
 
Nickel prices rose from levels below $15,000 a tonne before the Indonesia ban, and are currently trading at just below $18,500 a tonne.
 
 
Smelter projects by commodity^
 
(past feasibility study stage)
 
Commodity Projects
 
Nickel 30
 
Bauxite 5
 
Iron 7
 
Manganese 3
 
Zirconia 13
 
Lead and zinc 2
 
Zeolite and 4
 
Kaolinite
 
Total 64
 
 
Smelter projects according to stage of development^
 
Progress Stage Licenses*
 
(percent)
 
0-5 Feasibility Study 102
 
6-10 Environmental 14
 
Impact Assesment
 
11-30 Groundbreaking and 12
 
early construction
 
31-50 Middle stage of 21
 
construction
 
51-80 Final stage of 4
 
construction
 
81-100 Commissioning/ 25
 
Production
 
 
^Data compiled by Energy and Mineral Resources Ministry, July 2014. Excludes copper processing facilities.
 
 
(Additional reporting by Randy Fabi and Wilda Asmarini; Editing by Richard Pullin)
 
((fergus.jensen@thomsonreuters.com; +62 21 2992 7604; Reuters Messaging: fergus.jensen.thomsonreuters.com@reuters.net))
 
Keywords: INDONESIA METALS/EXPORTS