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Mining & Resources

Is the nickel industry facing the biggest shake-up in recent history?

4 Feb 2014, by Informa Insights

In a much debated ruling, the Indonesian government in January went through with its plan to ban the export of unprocessed ores. While the administration had first stated its plans for a raw materials export ban in 2009, the announcement had largely been ignored by many miners in the hope the plans would follow the fate of similarly controversial policies that had not been actioned. The implementation and enforcement of the long-discussed law is another step in the Indonesian government’s attempt to advance the local economy through regional processing.

At this stage, the total export ban still has many – albeit costly – exemptions. Miners can continue to export some raw materials that meet minimum purity levels such as copper, iron ore and zinc as long as they are willing to pay a 20 per cent tax that will increase to 60 per cent in the second half of 2016.

Nickel is not included in the exemption and with Indonesia being the world’s largest exporter for nickel, the industry is preparing for a market shake-up. According to a report by Reuters, the first Chinese firms have announced speeding up the construction of refineries in Indonesia for the production of nickel pig iron. In the case of nickel processing the required 4 per cent metal content can achieved in a blast furnace.

There is still a lot of confusion in the nickel industry on the details of the plan and the lack of clarity about the export rules for un-refined nickel, but the ban is widely being regarded as a big shake-up for the market. The ruling will certainly inform some of the discussion at the China Nickel conference, to be held on the 21-22 May in Shanghai.

Here are some opinions from our IMM LinkedIn group members.

nickel discussion export

What are your thoughts on the decision?  Share your views in the comment section below.

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