Indonesia to ban export of nickel ore by January

Waste from a nickel plant in Papua New Guinea is seen in the waters of the adjacent Basamuk Bay, in Indonesia’s Papua New Guinea. (Reuters)
Updated 02 September 2019
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Indonesia to ban export of nickel ore by January

  • Exporters to stop shipments from that date regardless of standing contracts

JAKARTA: Indonesia said on Monday it will stop nickel ore exports from Jan. 1, 2020, two years earlier than initially flagged as it speeds up efforts to process more of its resources at home.

Bambang Gatot Ariyono, the Mining Ministry’s director general for coal and minerals, said the ban will be applicable to all grades of nickel ore and ordered exporters to stop shipments from that date regardless of standing contracts.

“That is why we are announcing now so they have four months of transition time,” Ariyono told reporters.

Speculation about an expedited ban and Monday’s announcement has boosted nickel prices. The three-month nickel contract on the London Metal Exchange gained 3 percent to $18,470 a ton on Monday, its highest in nearly five years, adding to Friday’s 9 percent gain.

Goldman Sachs said in a note on Sunday it expects London nickel prices to reach $20,000 per ton in three months due to the ban.

Ariyono said the timetable was expedited because of the limited pool of mineable nickel resources in the country.

“The national proven reserve for nickel is only 698 million tons, which can only supply smelting facilities for 7.3 years,” he told reporters, adding that Indonesia currently has 11 working smelters with input capacity of 24 million tons of ore. It has 25 more smelting facilities in the pipeline.

The government had initially said it would ban nickel ore exports from January 2022, according to a rule released in 2017.

It is retaining that later date for the end of exports of bauxite and copper concentrates.

Indonesian President Joko Widodo in Parliament last month vowed to push for adding value to the country’s natural resources exports.

Philippine nickel miners said they are likely to boost output of nickel ore next year to fill up supply gap left by Indonesia.


South Korea downgrades Japan trade status as dispute deepens

Updated 18 September 2019

South Korea downgrades Japan trade status as dispute deepens

  • The change comes a week after South Korea initiated a complaint to the World Trade Organization
  • The new measures in effect mean it might take up to 15 days for South Korean companies to gain approvals to export sensitive materials to Japan

SEOUL, South Korea: South Korea on Wednesday dropped Japan from a list of countries receiving fast-track approvals in trade, a reaction to Tokyo’s decision to downgrade Seoul’s trade status amid a tense diplomatic dispute.
South Korea’ trade ministry said Japan’s removal from a 29-member “white list” of nations enjoying minimum trade restrictions went into effect as Seoul rearranged its export control system covering hundreds of sensitive materials that can be used for both civilian and military purposes.
The change comes a week after South Korea initiated a complaint to the World Trade Organization over a separate Japanese move to tighten export controls on key chemicals South Korean companies use to manufacture semiconductors and displays.
Seoul has accused Tokyo of weaponizing trade to retaliate against South Korean court rulings ordering Japanese companies to offer reparations to South Koreans forced into labor during World War II. Tokyo’s measures struck a nerve in South Korea, where many still resent Japan’s brutal colonial rule from 1910 to 1945.
According to South Korean trade ministry, the new measures in effect mean it might take up to 15 days for South Korean companies to gain approvals to export sensitive materials to Japan, compared to the five days or less it took under a simpler inspection process provided for favored trade partners.
Lee Ho-hyeon, a South Korean trade ministry official, said the change would affect about 100 local firms that export items such as telecommunications security equipment, semiconductor materials and chemical products to Japan. He said Seoul will work to minimize disruption to South Korean companies.
Japan for decades has enjoyed a huge trade surplus with South Korea, an economy that’s much more dependent on exports. Many major manufacturers heavily rely on parts and materials imported from Japan.
But the dispute is taking a toll. Exports to South Korea from Japan fell 9.4% last month, Japan’s Finance Ministry reported Wednesday.
The trade dispute between the neighbors erupted in July, when Japan imposed tighter export controls on three chemicals South Korean companies use to produce semiconductors and displays for smartphones and TVs, major export items for South Korea. It cited unspecified security concerns over Seoul’s export controls.
A few weeks later, Japan dropped South Korea from its own trade “white list,” triggered a full-blown diplomatic dispute that took relations between the US allies to their worst in decades.
The dispute has spilled over to security issues, with Seoul declaring it plans to terminate a bilateral military intelligence-sharing pact with Japan that symbolized the countries’ three-way security cooperation with the United States in the face of North Korea’s nuclear threat and China’s growing influence.
Following an angry reaction from Washington, Seoul later said it could reconsider its decision to end the military agreement, which remains in effect until November, if Japan relists South Korea as a favored trade partner.
Seoul announced its plans to downgrade Tokyo’s trade status in August before holding a 20-day period to gather opinions on the decision, during which the Japanese government voiced opposition to the move it described as “arbitrary and retaliatory,” Lee said.
He said Seoul needs to strengthen controls on shipments to a country that’s “hard to cooperate with” and fails to uphold “basic international principles” while managing export controls on sensitive materials.
South Korea previously divided its trade partners into two groups in managing export controls on sensitive materials. Following Wednesday’s change, South Korea now has an in-between bracket where it placed only Japan, which would mostly receive the same treatment in trade as the non-favored nations in what had been the second group.