Government allows export of low grade nickel ores, washed bauxite

By Thomas Sembiring

Miners producing low grade nickel ores with purity of less than 1.7 percent nickel and bauxite ores with purity less than 42 percent are now allowed to export the commodities following the issuance on Thursday of Government Regulation No 1/2017, which is the fourth revision of Government Regulation No 23/2010 on coal and mineral mining businesses, and the implementing Minister of Energy and Mineral Resources Regulation No 5/2017.

According to the new rules, domestic smelters are required to absorbed low grade nickel and bauxite ores up to a third of their installed capacity. The remaining output may then be exported.

The new policy is expected to benefit nickel miners particularly IDX-listed mining giant PT Aneka Tambang Tbk (Antam), which has been unable to sell its low grade nickel ores at home since the government banned export of mineral ores in early 2014 due to limited demand.

Japanese nickel smelters, which process low grade nickel ores, will also benefit from the policy as many of the smelters have been left idle since the introduction of the Indonesian export ban policy as they primarily sourced their raw materials from Indonesia. The new export ban relaxation policy was introduced by the Indonesian government ahead of an upcoming visit by Japanese Prime Minister Shinzo Abe.

Editing by Reiner Simanjuntak