On September 2 the country’s Energy and Mineral Resources Ministry confirmed plans to move the ban up and put it in place ahead of schedule. At a media briefing in Jakarta, Coal and Minerals Director General Bambang Gatot Ariyono told reporters that the country wants to focus on developing domestic smelters. “The government decided – after weighing all the pros and cons – that we want to expedite smelter building,” Ariyono said. “So we took the initiative to stop exports of nickel ores of all quality.” According to Ariyono, proven nickel stockpiles in Indonesia are between 600 mill. and 700 mill. t, despite estimated nickel ore reserves being closer to 2.8 billion metric tonnes. As Indonesia will soon house 36 smelters, he said nickel ore demand is set to grow from the current annual rate of 24 mill. t to 81 mill. t. “If we continue free exports, the proven reserves will be enough only for seven to eight years. The technology is advancing, so smelters can process low-grade nickel ores and they can be used for batteries to help Indonesia meet its electric-vehicle goals,” Ariyono said.
In the days leading up to the announcement, nickel prices made major leaps and bounds; on August 29, the base metal’s price rested at US$ 16,340 per tonne on the London Metal Exchange. By Monday, September 2, it had leaped to US$ 18,620. The metal has been on a hot streak since early July, where it started near US$ 12,500. Pricing began to make traction and saw a previous peak of US$ 16,080 on August 16, shortly after initial reports about Indonesia’s export ban came to light. At the time, experts pointed to two primary factors for the surge: optimism surrounding the electric vehicle market and speculation regarding the Indonesian ban. Analysts noted that while much of nickel’s price surge was speculative – stating that the metal’s fundamentals didn’t justify the rally – a bumped up export ban could see prices for the commodity “sent even higher.” (Investing News Network, September 3, 2019)