Indonesia may ease ban on nickel ore, bauxite exports

JAKARTA (REUTERS) - Indonesia may ease its ban on exports of unprocessed minerals, including nickel and bauxite, as the country undertakes a review of its mining policy this year given weak global commodity markets, the energy minister said on Friday (Feb 19).

Indonesia banned metal ore shipments in early 2014 to encourage firms to build smelters and shift exports from raw materials to higher-value finished metals. But the ban cost the country, the world's top nickel ore exporter at the time and a major supplier of bauxite, billions of dollars in lost revenue.

A 42 per cent plunge in nickel prices in 2015 and a 19 percent drop in aluminium, production of which starts with raw material bauxite, further aggravated problems as they forced many of Indonesia's nickel and bauxite miners to shelve smelter projects.

"There could indeed be a relaxation of the ore (export ban) if the revision of the mining law allows it," Energy and Mineral Resources Minister Sudirman Said told reporters. "The task of government is to facilitate economic growth."

The review of the 2009 mining law - that led to the export edicts and other regulations - will look at rules on all minerals, including nickel and copper, and any revision will need to be approved by the government and parliament, he added.

Earlier this week, Said said Indonesia will review rules banning exports of partially processed metal ores, including copper and zinc, as the smelters they were intended to develop have not materialized amid low commodity prices. Despite the proposals, the outcome of the revision remains unclear as the issue is politically sensitive in Indonesia, where the state is constitutionally bound to maximise returns from natural resources.

In September, Indonesia said it would not allow firms with smelters that were at least 30 per cent complete to export ore for a year, after having earlier said it was mulling the option in order to prop up its economy.