Indonesia Hopes to Attract Investment Through Banning Mineral Ore Exports
Indonesia is home to one of the largest mineral deposits on the entire planet. Consisting of a whopping 17,000 islands, the Asian country mines and produces a plethora of minerals including nickel, gold, bauxite, tin, copper and coal. In recent years, the Indonesian government has been mulling over banning the export of certain commodities, especially unprocessed metals that are currently in high demand.
By the start of the year, Indonesia was facing a World Trade Organization lawsuit over banned nickel exports because it is one of the largest producers of nickel on the globe and the export ban affected several industries along the supply chain including EV batteries and steel making.
Even though Indonesia lost the lawsuit, the country plans on expanding its export bans from nickel to include other raw materials as part of national plans to develop local industries and increase local jobs for residents.
Several months after President Joko Widodo announced that Indonesia was not intimidated by the WTO lawsuit and would expand its export bans, the leader is betting on the export bans bringing more value to the local economy by attracting investment. The nickel export ban was accompanied by policies that would require foreign buyers to invest in domestic smelters and process Indonesian nickel locally.
With Indonesia holding at least one-half of the world’s entire unprocessed nickel ore, these policies will likely bring plenty of investment into the country’s economy. Nickel is a key mineral in rechargeable nickel-cadmium batteries as well as electric vehicle batteries, making it one of the most in-demand metals.
Some experts don’t think Indonesia will stick to its new export policies because of its history of resource policy flip-flops. Furthermore, the president’s bet may not pay off if Indonesia fails to bring in enough foreign investment into local smelters and boost domestic mineral production.
Jokowi’s faith in the plan is strong, however, and he is even calling on his successor to stick with the export ban once he completes his second and final term in 2024. He encouraged the next president to “not be afraid of any other countries” and said that they must “fearlessly pursue industrialization” of the country’s immense collection of raw materials.
Indonesia has spent the past several decades mining its minerals and selling unprocessed raw materials to other countries, but it is now looking to retain these materials and build up its mineral value chain. The country is considering banning 21 commodities, including palm oil, natural gas, silver, gold crude oil and coal in exchange for around $545 billion in downstream investment by the year 2040.
As demand for different minerals skyrockets amid a supply shortage on the global market, companies such as Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) could see increasing investor interest as the products they specialize in take on greater strategic and security importance around the world, such as in detangling the United States from depending on Chinese-sourced rare earth metals.
NOTE TO INVESTORS: The latest news and updates relating to Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) are available in the company’s newsroom at http://ibn.fm/UURAF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Indonesia is home to one of the largest mineral deposits on the entire planet. Consisting of a whopping 17,000 islands, the Asian country mines and produces a plethora of minerals including nickel, gold, bauxite, tin, copper and coal. In recent years, the Indonesian government has been mulling over banning the export of certain commodities, especially unprocessed metals that are currently in high demand.
By the start of the year, Indonesia was facing a World Trade Organization lawsuit over banned nickel exports because it is one of the largest producers of nickel on the globe and the export ban affected several industries along the supply chain including EV batteries and steel making.
Even though Indonesia lost the lawsuit, the country plans on expanding its export bans from nickel to include other raw materials as part of national plans to develop local industries and increase local jobs for residents.
Several months after President Joko Widodo announced that Indonesia was not intimidated by the WTO lawsuit and would expand its export bans, the leader is betting on the export bans bringing more value to the local economy by attracting investment. The nickel export ban was accompanied by policies that would require foreign buyers to invest in domestic smelters and process Indonesian nickel locally.
With Indonesia holding at least one-half of the world’s entire unprocessed nickel ore, these policies will likely bring plenty of investment into the country’s economy. Nickel is a key mineral in rechargeable nickel-cadmium batteries as well as electric vehicle batteries, making it one of the most in-demand metals.
Some experts don’t think Indonesia will stick to its new export policies because of its history of resource policy flip-flops. Furthermore, the president’s bet may not pay off if Indonesia fails to bring in enough foreign investment into local smelters and boost domestic mineral production.
Jokowi’s faith in the plan is strong, however, and he is even calling on his successor to stick with the export ban once he completes his second and final term in 2024. He encouraged the next president to “not be afraid of any other countries” and said that they must “fearlessly pursue industrialization” of the country’s immense collection of raw materials.
Indonesia has spent the past several decades mining its minerals and selling unprocessed raw materials to other countries, but it is now looking to retain these materials and build up its mineral value chain. The country is considering banning 21 commodities, including palm oil, natural gas, silver, gold crude oil and coal in exchange for around $545 billion in downstream investment by the year 2040.
As demand for different minerals skyrockets amid a supply shortage on the global market, companies such as Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) could see increasing investor interest as the products they specialize in take on greater strategic and security importance around the world, such as in detangling the United States from depending on Chinese-sourced rare earth metals.
NOTE TO INVESTORS: The latest news and updates relating to Ucore Rare Metals Inc. (TSX.V: UCU) (OTCQX: UURAF) are available in the company’s newsroom at http://ibn.fm/UURAF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
