What is the Indonesian Nickel Ban?

A ban on unprocessed ore exports was imposed in 2014 to spur higher value smelting industries, but the government of Southeast Asia’s biggest economy has faced a hefty budget deficit and missed its 2016 revenue target by $17.6 billion. The resumption of shipments may have been drafted to help stop the gap. Indonesian mines may export up to 5.2 million tonnes of nickel ore a year under the country’s new rules, the mining minister said, only a fraction of its shipments when it was once a top global supplier of the stainless steel material. The new regulations, which took effect on Wednesday, sent nickel prices tumbling more than five percent to a four-month low of $9,660 a ton before they recovered. The rules include broad changes to permit extensions, which may now be applied for up to five years in advance of expiry, as well as new divestment requirements. Nickel miners must now dedicate at least 30 percent of their smelter capacity to processing low-grade ore, defined as below 1.7 percent nickel.

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