Indonesian smelter reiterates its opposition to mineral benchmark prices

Published: May 26, 2020 16:53

Save

SMM5 March 26: recently, the Indonesian smelting industry rejected the proposal to buy low-grade nickel ore from nickel miners. Previously, the Indonesian Minister of Energy and Mineral Resources Regulation No. 11 of 2020 on mineral reference prices set out the formula for calculating nickel commodities. The regulation is the third amendment to the 2017 Ministerial Regulation No. 07 on Energy and Mineral Resources, which deals with the process of determining benchmark prices for the sale of metals and coal minerals.

Puri Prihadi Santoso, president of the Indonesian Manufacturing and purification Industry Association, said the Ministry of Industry is working on a price formula to represent smelters. Because the price formula in the regulations often only represents the proposal of the miner, the price of nickel ore purchased from the miner is between $22 and $26.

He said he rejected the formula for calculating the price of nickel in the regulation, and so far no agreement has been reached between mining entrepreneurs and smelters on the price of nickel ore. The Ministry of Industry, represented by the General Administration of Ilmate, still provides guidance on finding win-win solutions, the Ministry of Maritime Affairs and Investment will call back to both sides, and the Ministry of Economic Affairs Coordination hopes to look at the optimization of national tax revenue from a downstream perspective, Prihadi said.

Meydy Katrin Lengkey, secretary general of the Indonesian Nickel Mining Association (APNI), said that the mineral benchmark price (HPM) is the legal umbrella and legal certainty of the miners. Up to now, prior to the ESDM Ministerial decree No. 11 on mineral benchmark prices in 2020, the sales price of nickel ore was determined by the smelting industry. However, since the smelting industry has not yet been agreed through the processing and purification Industry Association (AP3I), the regulation has not been fully implemented.

Meydy said the smelter proposal undermined justice and hurt the miners and was a form of violation of article 33 (3) of the 1945 Constitution, which states that land, water and natural resources are controlled by the state and are used to maximize the prosperity of the people. At present, the basic price reference for the smelting industry is 1.8%, with an average price of US $22 per wet metric ton.

However, the HPM of nickel in May 2020 was US $27.17 per wet metric tonne, and in fact, the production cost per tonne of nickel mine (HPP) reached US $20.34. He said miners would suffer losses of $1057 a tonne.

2020 China Ni-Cr stainless Steel Industry Market and Application Development Forum

Scan the QR code, apply for participation or join the SMM metal exchange group

Nickel ore mining import and export production capacity

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

2 hours ago

[SMM Analysis] Cost-Driven Axis, Recovering Demand Converge: 2026 Semi-Annual Review of Battery-Grade Nickel Sulphate

In H1 2026, the nickel salt (nickel sulphate) market experienced wild swings of "two rallies and two pullbacks," with price movements dominated by a pattern of cost support and demand-side drive.

2 hours ago

4 hours ago

Data: SHFE, DCE market movement (Jul 08)

The following table shows the ferrous and nonferrous metals movement on the SHFE and DCE on 08 Jul , 2026

4 hours ago

5 hours ago

[SMM Stainless Steel Flash] CBAM Expansion to Everyday Products: EU Cost Wave Looms for SMEs and Consumers

The EU Parliament's ENVI committee approved by 70% a draft report extending CBAM to downstream products including cars, appliances, furniture, building materials, and agricultural machinery, with implementation targeted from 2028. With the current EU carbon price at around EUR 80/tonne — projected to reach EUR 140 by 2030 and EUR 250 by 2045 — the expansion is set to systematically raise the cost of imported everyday goods and increase compliance burdens for SMEs, with no compensation mechanism in place. ACEA criticized the plan as technically flawed and inconsistent, calling for a postponement to at least 2030. Separately, EUROFER's claim of losing 30 million tonnes of capacity and 30,000 jobs over five years has drawn scrutiny: its own data shows actual job losses of around 17,000, while the capacity decline reflects reduced crude steel production rather than installed capacity — partly because European producers substituted slab imports from Russia, China, Brazil, and Indonesia to protect downstream margins, while holding accumulated free ETS certificates worth an estimated EUR 56 billion.

5 hours ago