After Canadian Vale SA' unit, PT Vale Indonesia Tbk (IDX: INCO) has completed the divestment of 20 percent shares, there are four other miner which are required to divest their shares to local entities - Photo by Bilaterals

JAKARTA (TheInsiderStories) – Indonesia’ energy and mineral resources ministry halt nickel ore export for temporally starting today to evaluate the nickel mining contract, said the minister on Tuesday (10/29). While, the senior minister for maritime and investment affairs Luhut Binsar Panjaita assured that the ban will fully effective on Jan. 1, 2020.

The new minister Arifin Tasrif, said the evaluation included checking existing export cargoes, volumes and the development of smelter construction. He stated, “The evaluation are part of determining future policies regarding the export of nickel ore.”

While, Panjaitan explained, the cessation of nickel ore exports was carried out after it was detected that there had been a quota increase up to three times, since the announcement of the acceleration of the nickel ore export ban in 2020. Based on reports received, the average export reaches 100 – 130 ships per month, more than the normal capacity of around 30 vessels per month.

“We evaluate and then we stop temporarily until the inspection by Customs, Corruption Eradication Commission and other parties finished,” he stressed.

Panjaitan said the ban of nickel ore exports will be lasted in the one to two weeks starting today. In the event conditions return to normal, export might be reopened, he adds.

He revealed, that the government wanted all parties to comply with the export provisions for nickel ore. He suspected that the high nickel exports in the last two months have been carried out by manipulating the grade and quota of nickel export.

“This extraordinary surge has been two months from the beginning of September. It is damaging and detrimental to the country. They are manipulating levels and quotas and have no smelters,” said the senior minister.

On the other hand, head of the Investment Coordinating Bahlil Lahadia invited 35 smelter companies to support the government policy. He rated, that the problems faced by smelter companies are very diverse, ranging from licensing, land, infrastructure, raw materials, and taxation.

One of the main problems is the limited raw materials, in the form of mining ore, that caused by illegal export activities of raw materials, such as nickel ore. Therefore, the smelter entrepreneurs should compete for buying raw materials whose numbers are decreasing.

In addition, the chief said, international nickel ore prices are higher than domestic purchase prices. Therefore, the company prefer to export raw ore, so the smelter industry will be in difficult to get raw materials.

Beside, Indonesia will lose the added value generated from processing nickel ore in the country. Thus, the government will take decisive action to stop illegal exports by involving relevant parties.

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