Japan may take Indonesia to WTO over mineral export ban

TOKYO (REUTERS) - Japan is preparing to take Indonesia to the World Trade Organisation (WTO) over a ban on exports of mineral ores that has curtailed supplies for industry, the Nikkei business daily said on Thursday.

The Japanese government is set to seek talks with Indonesia through the WTO this month, the report said, without citing sources. If the issue was not resolved, Japan would request that a panel be appointed to look into the case, it added.

If the bilateral talks failed, Japan was likely to team up with China, another big buyer of minerals from Indonesia, to seek remedial action, the report said.

A senior official at Japan's Ministry of Economy, Trade and Industry (Meti) told Reuters no decision had been made to pursue the issue with the WTO, but it remained a possibility.

"Bringing the issue to WTO is one of our options, but we have not made any decisions," said Osamu Onodera, Meti director, who handles WTO compliance and dispute settlement.

Japan, home to some of the world's biggest stainless steel producers, is facing higher costs and scrambling to find new supplies of nickel after Indonesia enforced an export ban on the raw material last month.

Global nickel prices rallied after Indonesia banned unprocessed exports of nickel and other minerals from Jan 12 in a move aimed at getting higher returns for its resources by forcing companies to refine the minerals on Indonesian soil.

Japan imported 44 per cent of its nickel ore from Indonesia in 2012. Indonesia's mines ministry forecast in late January that 2014 nickel production would slump 94 per cent to 3.5 million tonnes.

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