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

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.


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 53 min 30 sec ago

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Opinion

This section contains relevant reference points, placed in (Opinion field)

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.