JAKARTA - Indonesia will ban exports of nickel ore, the raw material used in stainless steel and batteries, at the end of December, two years earlier than planned.
The aim is for the country, the top global source of nickel ore, to book higher export revenue by shipping value-added intermediate products overseas.
The decision means local miners have to soon start processing the raw metal domestically before shipping overseas. This is expected to help Indonesia tackle a widening current account deficit - the Southeast Asia's largest economy imports more goods and services than it exports - amid a global economic slowdown.
Energy and Mineral Resources Minister Ignasius Jonan said on Friday that the nickel export curbs are "in line with President Joko Widodo's directives".
Indonesia's current account deficit reached US$31.1 billion (S$43.2 billion) in 2018. The widening deficits were an issue Mr Joko's political opponents frequently played up during his presidential campaign ahead of the April election. Mr Joko will be sworn in on Oct 20 to begin his second and final five-year term.
A senior government official had earlier argued that Indonesia could have recorded even higher deficits had the country not boosted efforts to climb up the value chain in the iron and steel sector, encouraging investors to build plants at home to process raw nickel into intermediate products such as stainless steel slabs.
Indonesia recorded stainless steel exports of US$5.75 billion in 2018, a five-fold increase from 2014, when the country booked US$1.1 billion. Indonesian stainless steel has penetrated South Korea, India and Taiwan markets.
In July, China's Ministry of Commerce imposed anti-dumping duties on some stainless steel products imported from Indonesia, Japan, South Korea and the European Union. Anti-dumping tariffs of 18.1 per cent to 103.1 per cent were applied to various items starting on July 23.
The early ban of nickel ore exports is also expected to give a boost to investors who have started building or who are eyeing to build processing smelters in Indonesia. The government has been pushing miners at home to build smelters locally.
Miners have been warned about their slow progress in building smelters, with the government threatening to stop issuing nickel ore export permits.