Indonesia's competition watchdog looks into nickel sector after cartel complaint

JAKARTA, Nov 18 (Reuters) - Indonesia’s anti-monopoly agency has begun a preliminary study of the country’s nickel smelting sector, an agency official said on Monday, after a miners’ association accused big nickel smelters of conducting a cartel.

The agency will decide whether to launch a full investigation of pricing and other practices in the industry after completing its initial enquiries, Guntur Saragih, a commissioner at Indonesia’s Commission for the Supervision of Business Competition (KPPU), told a news briefing.

The Indonesian nickel miners association (APNI) has claimed that two giant smelters control 60% of the local nickel ore market and determine prices in Indonesia, the world’s biggest nickel ore exporter. It has not named the two smelters.

Last week APNI’s secretary general Meidy Katrin Lengkey told reporters that the anti-monopoly agency had launched an investigation over the complaint, but Saragih said the initial study only began on Monday and would last 30 days and was not a full investigation.

KPPU would also look at government rules on nickel ore pricing, M. Zulfirmansyah, a director at the agency, told the same briefing.

Indonesia’s nickel smelting sector is dominated by foreign companies including Chinese players.

APNI has often argued that local smelters push nickel ore prices down despite a monthly benchmark price set by the government, making the domestic market less attractive than selling overseas.

Indonesia’s mining ministry is revising the rules that govern the domestic price of nickel ore to ensure smelters follow government benchmark prices, a ministry official told Reuters last month.

The ministry aims to finalise the rule changes in January when Indonesia is due to introduce a ban on nickel exports in order to encourage processing of more minerals at home and generate more value from the country’s natural resources. (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy; Editing by Susan Fenton)