{"id":10006,"date":"2023-11-06T01:46:41","date_gmt":"2023-11-06T01:46:41","guid":{"rendered":"https:\/\/infundpros.com\/business\/crackdown-on-illegal-mining-forces-indonesia-to-import-nickel-ore\/"},"modified":"2023-11-06T01:46:41","modified_gmt":"2023-11-06T01:46:41","slug":"crackdown-on-illegal-mining-forces-indonesia-to-import-nickel-ore","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=10006","title":{"rendered":"Crackdown on illegal mining forces Indonesia to import nickel ore"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=557478a8-0ec5-4495-9102-fb8781ba7451\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Supply shortages caused by Indonesia\u2019s crackdown on illegal nickel mining have forced the country to import large quantities of ore from the Philippines to keep smelters operating.<\/p>\n<p>Indonesia, the world\u2019s largest nickel producer, has in recent months pursued a corruption investigation across the government that has led to delays in the issuance of quotas for nickel mining.<\/p>\n<p>More than 53,000 tonnes of nickel ore and concentrates were shipped in May and June from the Philippines to Indonesia\u2019s Morowali region, where Tsingshan, the world\u2019s largest stainless steel producer, runs a large nickel smelting complex, official Indonesian customs data shows.<\/p>\n<p>Those imports continued until at least September, including a single shipment of 39,500 tonnes from the Philippines to Weda Bay, another large nickel smelting complex, according to industry executives and a customs document seen by the Financial Times.<\/p>\n<p>Indonesia has rapidly risen to produce half the world\u2019s nickel, a material vital to stainless steel and the batteries used in electric vehicles, but automakers and other customers are concerned the ferocious growth has come at a high cost. <\/p>\n<p>Nickel ore contains more than 98 per cent waste and shipping it internationally is rare given the expense. Indonesia\u2019s sudden pausing of quota issuance highlights how its regulation and enforcement have struggled to keep up with the searing pace of the industry\u2019s growth.<\/p>\n<p>The Indonesian government has set up a task force to attempt to restart quota issuance. The mining ministry last month held discussions with mining companies that had run out of quota and could not operate normally, according to a letter seen by the FT. However industry executives said no real solutions had emerged from the talks. <\/p>\n<p>\u201cWhether the approvals will come in time is still left to be seen,\u201d said the head of one nickel company in Indonesia who met the government, referring to the urgent need to source supplies to keep their smelter running to the end of the year. <\/p>\n<p>French miner Eramet last month cut its forecast for 2023 nickel ore production from its flagship Weda Bay mine by 5mn tonnes to 30mn tonnes because of the lack of quota.<\/p>\n<p>The case that started the government crackdown relates to Aneka Tambang, the state-owned miner, after neighbouring mines that ran out of nickel reserves were found to have illegally mined in areas assigned to the company. <\/p>\n<p>The Indonesian government said the illegal mining cost the state hundreds of millions of dollars in state revenue. Indonesia classifies actions that lead to such losses as \u201ccorruption\u201d.<\/p>\n<p>The anti-corruption drive is part of a concerted suite of policies from the government to generate value that includes moves to process minerals domestically and build its own steel and battery production.<\/p>\n<p>Yanchen Wang, managing director in London of data provider Shanghai Metals Market, said the crackdown on illegal mining could be followed by a cap on production of nickel pig iron, used in stainless steel, to encourage output of higher value products for batteries.<\/p>\n<p>\u201cThe Indonesian government will want to maximise their revenue from their nickel reserves,\u201d he said.<\/p>\n<p>Prices of Philippine nickel ore have jumped 23 per cent to $65 per wet metric tonne since August and the premium for Indonesian nickel ore over the local price benchmark has surged from about $5 to $20 per wet metric tonne on panic buying, according to Mysteel, a Chinese steel consultancy.<\/p>\n<p>Some analysts believe the supply issues could start feeding through to global nickel prices. Citi turned from bearish to neutral, predicting that prices could rise to $20,000 per tonne, up from $18,100 at present, on supply constraints.<\/p>\n<p>\u201cRisks to Indonesian nickel supply are growing due to ore grade depletion, regulatory scrutiny, mining quota issuance delays, rising pressure to address ESG concerns [and] the lower price environment,\u201d the US bank\u2019s analysts wrote in a report. They suggested Indonesia might also use its dominance of global nickel production to reduce supply to push up prices.<\/p>\n<p>Olivier Masson, nickel analyst at Fastmarkets, a commodity data provider, said there could quickly be a \u201cchokepoint for refined nickel supply\u201d if production at some mines was stopped until the end of the year and stockpiled material ran low.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/557478a8-0ec5-4495-9102-fb8781ba7451\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Supply shortages&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-10006","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Crackdown on illegal mining forces Indonesia to import nickel ore | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Supply shortages caused by\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=10006\" \/>\n<meta property=\"og:locale\" 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