Indonesia Gives Details on Its Mineral Export Ban
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Posted On: 01/14/2014 11:12:34 PM
Indonesia Gives Details on Its Mineral Export Ban
Indonesia clarified its controversial mineral export ban Monday, closing the door on the export of ores but allowing the export of six forms of concentrate that will permit some of the country's biggest foreign miners to continue operations. The government
clarified on Monday that miners in Indonesia can pay a 20%tax to be able to export Cu, Fe ore, Mn, Pb, Zn and ilmenite for three years as long as the shipments meet minimum purity levels.
The export of mineral ores, including nickel and bauxite, is off limits.
Mark Shelby of Royal Nickel Corporation (RNC.T)made the following points with regards to the Indonesia’s total ban on Ni ore exports. The effect is to remove 25-30%of the world Ni supply from the world market. Indonesian ore exports in 2013 expected to be >50Mt containing ~600kt of nickel in 2013.
Approximately 3/4 of Chinese NPI production was sourced from Indonesian ore and the export ban will also severely impact nickel producers in Ukraine, Australia, and Japan
China has a limited ability to replace Indonesian ore and there is no certainty that significant NPI/Fe Ni capacity will be built in
Indonesia in the near future
There are very limited sources of high-grade (1.8%+) laterite ores outside Indonesia. RNC believes that the Philippines could only supply 5-10Mt of high grade ore (only 10-20%of Indonesian current exports). Please note that the Philippines has also considered export restrictions as well. As a result, a strictly enforced ban could Pb the world to run out of nickel as early asmid-2015 despite record LME inventories of 260 k t and large ore stockpiles in China 30-35Mt of ore stocks to be fully consumed to sustain 2014 Chinese
NPI production at 450-500kt Adecline in Chinese NPI production to 100-200kt in 2015 will Pb to market deficits of 300-400kt that can consume the LME Ni inventory byH215.
Comment: Indonesia’s move to ban the export of Ni ores should be very positive for Ni prices in the intermediate term. In the longer term, the limited high grade laterite Ni Resources will limit production of low cost Ni pig iron. As a result, we believe that
Ni prices will increase and there will be justification for new Ni mines.
Indonesia clarified its controversial mineral export ban Monday, closing the door on the export of ores but allowing the export of six forms of concentrate that will permit some of the country's biggest foreign miners to continue operations. The government
clarified on Monday that miners in Indonesia can pay a 20%tax to be able to export Cu, Fe ore, Mn, Pb, Zn and ilmenite for three years as long as the shipments meet minimum purity levels.
The export of mineral ores, including nickel and bauxite, is off limits.
Mark Shelby of Royal Nickel Corporation (RNC.T)made the following points with regards to the Indonesia’s total ban on Ni ore exports. The effect is to remove 25-30%of the world Ni supply from the world market. Indonesian ore exports in 2013 expected to be >50Mt containing ~600kt of nickel in 2013.
Approximately 3/4 of Chinese NPI production was sourced from Indonesian ore and the export ban will also severely impact nickel producers in Ukraine, Australia, and Japan
China has a limited ability to replace Indonesian ore and there is no certainty that significant NPI/Fe Ni capacity will be built in
Indonesia in the near future
There are very limited sources of high-grade (1.8%+) laterite ores outside Indonesia. RNC believes that the Philippines could only supply 5-10Mt of high grade ore (only 10-20%of Indonesian current exports). Please note that the Philippines has also considered export restrictions as well. As a result, a strictly enforced ban could Pb the world to run out of nickel as early asmid-2015 despite record LME inventories of 260 k t and large ore stockpiles in China 30-35Mt of ore stocks to be fully consumed to sustain 2014 Chinese
NPI production at 450-500kt Adecline in Chinese NPI production to 100-200kt in 2015 will Pb to market deficits of 300-400kt that can consume the LME Ni inventory byH215.
Comment: Indonesia’s move to ban the export of Ni ores should be very positive for Ni prices in the intermediate term. In the longer term, the limited high grade laterite Ni Resources will limit production of low cost Ni pig iron. As a result, we believe that
Ni prices will increase and there will be justification for new Ni mines.
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