JAKARTA (Reuters) - Indonesia’s nickel miners are prepared to sell their ore to local smelters if they are offered competitive pricing compared with overseas buyers, the secretary general of the nickel miners association Meidy Katrin Lengkey said on Tuesday.
Indonesia, the world’s biggest nickel ore exporter, allowed nine nickel companies to resume ore exports this week, after halting shipments for two weeks to investigate reports of export rule violations. Two more companies are expected to resume exports later this week.
The status of 26 other companies believed to have export quotas is not clear.
The Indonesian nickel miners association (APNI) estimates 8 million tonnes of nickel ore export quotas have not been utilized yet.
“If local smelters were to buy the ores under the same conditions as exports, why would we export? We would rather sell locally,” Lengkey said.
She said after talks on Tuesday with Indonesia’s investment coordinating board (BKPM) and the nickel smelters association, nickel cargoes from companies which did not pass inspections by Indonesian authorities would be sold to local smelters in a fixed price range of $27-$30 per tonne FOB up to Dec. 31.
Local smelters, which typically prefer high-grade ore, will buy ore with below 1.7% nickel content from the miners, BKPM chief Bahlil Lahadalia said.
“BKPM has arranged for around 2 million tonnes of ore this month to be absorbed by the smelters with that pricing,” Lahadalia said.
Ore shipments were halted on Oct. 28 following reports indicating a surge in exports when the country brought forward a ban on exports by two years to January.
The export surge reportedly included major sales of high-grade nickel ore, even though Indonesia only permits exports of ore with less than 1.7% nickel content.
Indonesia has pledged to enforce its export ban in January 2020, though the uncertainty has rattled global nickel markets.
The companies allowed to export again must prove their smelter projects were progressing as planned, show valid export approval documents and that ores were of the required quality, according to Indonesia’s customs director general Heru Pambudi.
Reporting by Bernadette Christina Munthe; Writing by Fransiska Nangoy; editing by David Evans