* Chinese ministries meeting with metals firms investing in
* Companies want financing help, information on Indonesian
By Polly Yam
HONG KONG, Feb 20 Beijing is organising a
delegation of Chinese companies that have plans to build metals
plants in Indonesia, in a first sign the government may be
concerned over ore supplies because of the Southeast Asian
country's mineral ore export ban.
China's Ministry of Commerce is planning the trip to visit
Indonesian government officials to seek clear policies for
planned and potential China-led investments, though the timing
of the visit has not been decided, industry sources said.
The plan for the trip was revealed in a meeting between
companies and government officials last week in Beijing, said
two industry sources with direct knowledge of the discussions.
They declined to be named because the meeting was private.
Companies in the meeting had asked Beijing to provide
support in financing, information on investment conditions after
finding it difficult to raise funds for their projects, and help
in predicting policies in Indonesia, the sources said.
At the meeting were executives from some thirteen metals
companies planning to build ferro-nickel production plants or
alumina refineries, along with officials from the Ministry of
Commerce, the National Development and Reform Commission and the
Ministry of Foreign Affairs, the sources said.
Indonesia was China's top supplier of nickel ores and
bauxite, or aluminium ores, in 2013.
Beijing, encouraging big Chinese companies to invest in
overseas projects while trying to ease overcapacity in the
domestic metals industries, wants to use the Indonesian ban to
cut local capacity for nickel pig iron, said one of the sources.
"(The government) expects that the Indonesian ban would help
consolidate China's ferro-nickel sector," the source said.
The ban would push up ore prices, forcing ill-financed,
small producers to close, the source said.
Indonesian nickel ores are typically used to produce nickel
pig iron, a low-grade ferro-nickel in China.
Chinese firms stepped up plans to build plants in Indonesia
to produce nickel pig iron after Jakarta banned mineral ore
exports in January; firms were more cautious about building
alumina refineries due to the size of investment.
China has annual capacity to produce more than one million
tonnes of nickel in nickel pig iron. Actual output, though, was
less than half a million tonnes of nickel in 2013, according to
information provider SMM.
(Reporting by Polly Yam; Editing by Tom Hogue)