Indonesia is probing a sudden surge in nickel ore exports and has told miners to suspend them.
The world's biggest nickel ore producer is looking into whether the exports comprised only unprocessed low-grade mineral, defined as below 1.7 per cent nickel.
The country has banned all exports of higher-grade ore and is allowing only the export of low-grade mineral until the year-end, in its attempt to get miners to build nickel smelters and thus expand local processing capacity.
Mr Bahlil Lahadalia, chief of the investment coordinating board, said the country's nickel miners agreed on Monday to stop nickel ore exports immediately.
Indonesia, which limits exports by allocating strict quotas to eligible miners, has long required higher-grade nickel ore to be processed at domestic smelters.
"Some of those shipments were allegedly not ore containing mineral below 1.7 per cent nickel," Mr Bahlil told The Straits Times yesterday, referring to the recent surge in shipments out of the country.
He also alleged that some of the recent exporters were not those building a smelter.
The government has given permits - with a certain quota for exports - only to nickel miners who have begun construction of a processing plant to produce various items, like higher-valued stainless steel coil.
Last month, Indonesia brought forward a ban on shipments of all nickel ore to Jan 1 next year, from 2022. The decision pushed up nickel prices on the London Metal Exchange, as smelters outside the country suddenly did not have sufficient quantities of the ore to buy.