Indonesian Ore Export Ban to Boost Nickel

21 April, 2012 | Source: Jakarta Globe

Indonesia’s planned ban on exports of unprocessed metal ores may push nickel prices higher and revive production at idled mines, according to Norilsk Nickel.

Several mines across the world are idled because their output is unprofitable at current prices, said Anton Berlin, head of marketing at the company, the world’s largest producer of nickel and palladium. If Indonesia’s proposed ban pushes prices above $20,000 a metric ton, those mines may resume ore extraction, he said.

“If this ban is executed in full and is applied perfectly, a significant volume of ores will be under-supplied to China,” Berlin said on Wednesday in Moscow. The global reserve of production capacity can compensate for that under-supply, he added.

Indonesia, the largest nickel-ore and bauxite supplier to China, announced the prohibition in February, two years ahead of schedule, to increase the value of commodity shipments. Refined nickel for three-month delivery on the London Metal Exchange has fallen 20 percent since this year’s high on Feb. 8 as production surged. Indonesia plans to ban exports of unprocessed ores from May, with an exemption for producers that intend to treat output locally. The Energy and Mineral Resources Ministry has received proposals from 17 companies to build processing plants.


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