Indonesian mining official denies any news on bringing forward mineral export ban from 2022

There has been a buzz in the metals market that Indonesia might bring forward a planned ban on mineral ore exports from 2022. However, a key Indonesian mining ministry official said that there is no speculation on whether the government might bring forward a planned ban on mineral ore exports from 2022.

The purpose of the ban is making domestic miners process minerals in Indonesia, a major exporter of nickel ore and bauxite.

The buzz in the metals market on Monday, August 5 that the ban might be brought forward, sent prices to a four-year high on the Shanghai Futures Exchange and to a two-week high at US$US14,930 a tonne on the London Metal Exchange. Yesterday, three-month nickel on the London Metal Exchange rallied as much as 12.7%, while the most-traded nickel contract on the Shanghai Futures Exchange rallied to RMB 124,890 ($17,736.53) per tonne, its highest on record. However, no impact was seen on bauxite prices.

"I don't want to speculate in that regard," Bambang Gatot Ariyono, director general of mineral and coal at the mining ministry, said in response to the question on change of legislation to ban exports.

Under a 2017 mining regulation, Indonesia would stop allowing the export of unprocessed ore starting on January 12, 2022, after the five-year grace period to miners for building smelters onshore.

"As long as there is no new regulation, the current one remains in effect," Ariyono added.

Indonesian government grants mineral ore export permits to companies which are building smelters and review the constructions every six months. Indonesian state miner PT Aneka Tambang Tbk (Antam) expects to ship 2.8 million tonnes of bauxite in 2019, more than triple the estimated 850,000 tonnes in shipments for 2018. China, the top importer of Indonesian bauxite, imported about 4.63 million tonnes of bauxite in the first four months of 2019.  According to recent estimates, Indonesia is estimated to export a total volume of 11.11 million tonnes of bauxite in 2019.