Indonesia, the world’s largest mined nickel producer, will proceed with a plan to ban mineral-ore exports for mining companies without smelters next month, while regulating shipments by miners that do process ore.
The government will issue a regulation before the prohibition starts from Jan. 12, Energy and Mineral Resources Minister Jero Wacik told reporters in Jakarta today. The rule will provide details on the minerals that can be exported, said Coordinating Minister for the Economy Hatta Rajasa.
Indonesia is seeking to boost the value of shipments by promoting domestic processing. The country accounts for 18% to 20% of global nickel supplies, 9% to 10% of aluminum supply from bauxite and 3% of copper supply, Goldman Sachs Group Inc. estimates. Freeport-McMoRan Copper & Gold Inc., the owner of the Grasberg mine, said Dec. 12 it was working with the government to clarify the ban.
“The government will consistently implement the Mining Law and from Jan. 12 raw minerals will no longer be permitted for export,” said Wacik. “Everyone must meet the requirements. No more ore exports. There should be refining or smelting.”
Nickel for delivery in three months climbed to a seven-week high of $14,480 a metric ton on the London Metal Exchange on Dec. 23 on concern the prohibition will reduce supplies. The metal traded at $14,279 today. Copper advanced 1.5% to $7,395 a ton today, the highest in four months.
Freeport, owner of the world’s second-biggest copper mine at Grasberg, has said it intends to abide by the terms of its contract of work, which allow it to export concentrate. PT Newmont Nusa Tenggara, a Newmont Mining Corp. unit, is willing to discuss setting up a consortium to study additional smelting, President Director Martiono Hadianto said on Dec. 10. It runs the Batu Hijau copper and gold mine on Sumbawa island.
Wacik declined to comment on whether Freeport and Newmont, which supply concentrates, will be allowed to ship overseas.
“Regarding purity, the Law doesn’t explain the percentage,” said Rajasa. “Some purification is already done here although it’s not yet 100%. This will be regulated in the Government Regulation.”
