Metals News
Large mining enterprises happy to see Indonesian nickel mine export ban plans to expand smelting capacity
Sep 12,2019
Source:Wenhua Finance and Economics
The content below was translated by Tencent automatically for reference.

SMM: on Wednesday, the big miners welcomed the Indonesian government's recent decision to ban the export of nickel ore from next year as they plan to increase smelting capacity.

The Indonesian government announced last month that it would ban the export of nickel ore from January 1, two years ahead of schedule, as it was eager to keep more mineral resources at home for processing. This has raised concerns about tight supply and financing problems for small smelters.

Indonesia is the world's largest supplier of nickel ore.

Large mining enterprises happy to see Indonesian nickel mine export ban

At a meeting of nickel (Asian Nickel) in Asia on Wednesday, senior officials at large miners said Indonesia's ban on ore exports would support the development of the country's nickel processing industry.

"for Vale Indonesia, there is a great opportunity for Vale to boost our output in Indonesia," said Steven Brown, president of Vale Indonesia. "

Indonesia said the ban on the export of nickel ore was a reserved ore supply for the battery-grade nickel industry used in the future rapidly expanding domestic nickel pig iron smelting stainless steel and electric car industries.

Indonesia, the world's largest nickel ore producer, accounted for 26 per cent of the world's nickel ore supply last year, while China was the world's largest nickel consumer, according to (INSG), the international nickel research group.

China imports nickel ore to produce nickel pig iron, which is later used to produce stainless steel.

Indonesia imposed its first ban on nickel ore exports in 2014, when it led to a sharp rise in nickel prices, and in 2017, the country relaxed export restrictions and began implementing a quota system for nickel ore exports.

International nickel prices have risen sharply by 76 per cent since the start of the year.

"if we take a step back and see if this is a successful industrial policy in Indonesia, I think the answer is a loud 'yes'," Mark Selb, president of Selby&Co, said at the nickel industry conference.

"the result of the nickel ore ban is tens of billions of dollars of investment into Indonesia, which is likely to receive more mining investment than any other developing country in the world, given that mineral resources are not unlimited."

Smelting capacity

Over the past few years, smelters in Indonesia have significantly increased production of nickel pig iron, nickel iron or other nickel ore products. These products are mainly used in the production of stainless steel. In 2014, Indonesia's nickel pig iron production plan was blank.

Indonesia's nickel pig iron output has soared to 261000 tons a year in 2018, and industry figures expect it to rise further to 530000 tons a year by 2020.

"the good thing is that more of the company's smelters will be built and put into production," said Dimas Wikan Pramuditho, chief financial officer of Aneka??Tambang, an Indonesian state-owned miner. "

He said the company plans to further increase nickel-iron production to 40500 tons per year next year, up from the current 27000 tons per year, while Aprilandi Hidayat Setia, commercial director of Aneka Tambang, said it plans to further increase nickel pig iron production by at least 93500 tons per year by 2024.

Tsingshan, Indonesia's largest producer of raw nickel, will add 100000 tonnes of nickel to its current output level of 220000 tonnes a year next year, according to sources.

Vale Indonesia plans to build a new nickel-iron smelter in Indonesia and expand existing nickel-matte capacity.

Nickel also plans to build several battery-grade nickel projects in Indonesia because of optimistic demand prospects for the electric vehicle industry, despite challenges in financing and cleaning waste treatment and obtaining permits to operate the project.

Tsingshan and its partners have a total battery-grade nickel capacity of 110000 tonnes (in nickel content) in Indonesia and are expected to start production by the end of 2020, depending largely on licensing and financing issues by the authorities.

Vale Indonesia and Sumitomo Metal Mining are conducting a feasibility study on the construction of a battery grade nickel project in Indonesia with an annual capacity of 40000 tons.

Indonesia's Harita Group and China's Ningbo Liqin Mining (Ningbo Lygend) are planning to build another battery-grade nickel plant in Indonesia.

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