19th December 2013

Indonesia to Study Rules for Miners With Smelters as Ban Looms – by Yoga Rusmana and Agus Suhana (Bloomberg News – December 19, 2013)

posted in Asia Mining, International Media Resource Articles, Nickel |

http://www.bloomberg.com/

Indonesia, the world’s largest mined nickel producer, will study rules for mining companies operating smelters as a ban on mineral-ore shipments nears, said Coordinating Minister for the Economy Hatta Rajasa.

The government will seek legal advice on the regulations as interpretations differ, Rajasa said today. The law that bans shipments must be fully implemented and companies that don’t have smelters will have to comply, he said.

Freeport-McMoRan Copper & Gold Inc. (FCX), owner of the world’s second-biggest copper mine at Grasberg, said last week it intends to abide by the terms of its contract of work, which allow it to operate the mine and export concentrate. Indonesia is seeking to boost the value of shipments by promoting local processing and is set to prohibit all ore exports after Jan. 12.

“We will look at regulations but they cannot contradict the law,” Rajasa told reporters in Jakarta. “We must pay attention to business concerns.”

Three-month nickel advanced 0.2 percent to $14,165 a metric ton on the London Metal Exchange at 8:39 p.m. in Singapore. The price of the metal used to make stainless steel rallied to $14,227 on Dec. 12, the highest level since Nov. 6. Copper futures climbed to $7,307.70 a ton on Dec. 16, the highest price since Oct. 23, and traded at $7,220.75 today.

Spurring Investments

Southeast Asia’s largest economy accounts for 18 percent to 20 percent of global nickel supply, 9 percent to 10 percent of world aluminum supply and 3 percent of copper supply, said Goldman Sachs Group Inc. An export ban on mineral ores may spur more than $30 billion of investment in processing facilities, Goldman Sachs analyst Max Layton said in a report dated Dec. 17.

The prohibition was endorsed by parliament without concessions on Dec. 5 and Energy and Mineral Resources Minister Jero Wacik said that day it would be implemented. Bachrul Chairi, director-general of foreign trade at the Trade Ministry, said last week the halt applied to all companies, including contract-of-work holders such as Freeport and Newmont Mining Corp., and that concentrate exports would not be allowed.

PT Newmont Nusa Tenggara is willing to discuss setting up a consortium with the government and other companies to study the possibility for additional smelting, President Director Martiono Hadianto said Dec. 10. Newmont runs the Batu Hijau copper and gold mine on Sumbawa island.

For the rest of this article, click here: http://www.bloomberg.com/news/2013-12-19/indonesia-to-study-rules-for-miners-with-smelters-as-ban-looms.html

 

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