November 13, 2019 / 1:04 PM / a month ago

Indonesia anti-monopoly body to investigate nickel smelters

JAKARTA (Reuters) - The Indonesia nickel miners association said on Wednesday the country’s anti-monopoly body has launched an investigation into alleged cartel practices impacting pricing by local smelter operators.

FILE PHOTO: A worker poses with a handful of nickel ore at the nickel mining factory of PT Vale Tbk, near Sorowako, Indonesia, January 8, 2014. REUTERS/Yusuf Ahmad/File Photo

The probe was launched after the nickel miners association (APNI) filed a complaint a few months ago, secretary general Meidy Katrin Lengkey told reporters.

She said two giant smelters controlled 60% of the domestic nickel ore market and local prices.

“Because their demand is so dominant, they control the prices and other smelters, like it or not, have to follow,” Lengkey told reporters.

An official at the anti-monopoly body, the Commission for the Supervision of Business Competition (KPPU), did not immediately respond to a request for comment.

APNI has often argued that local smelters push nickel ore prices down, making the domestic market less attractive than selling overseas.

Lengkey also said domestic smelters only bought high-grade ores.

Indonesia, the world’s biggest nickel ore exporter, will stop allowing exports starting January as it pushes to process more minerals at home.

In a hearing with a parliamentary committee on Wednesday, Lengkey said ores with 1.7% nickel content were priced on average at $14 per ton FOB in the domestic market, below the average $30 per ton government-set benchmark price this year.

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

On Tuesday, Lengkey said nickel miners were prepared to sell their ore to local smelters if they are offered competitive pricing compared with overseas buyers.

Indonesia temporarily halted exports earlier this month after reports of a surge in monthly ore exports following its decision to move the export ban to 2020 from 2022.

Reporting by Bernadette Christina Munthe; Writing by Fransiska Nangoy; Editing by Elaine Hardcastle

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