Exports due to be shipped from Indonesia, the world’s biggest nickel ore producer, will be bought by local smelter operators at an international price level, Lahadalia said.
“This agreement was carried out not on the basis of a letter from the government or technical ministry, but a joint agreement,” Lahadalia said. “Where the agreement is carried out by the nickel association with us the government.”
Indonesia’s government in September expedited the ore export ban by two years as part of its efforts to boost expansion of a local smelting industry.
Expectations of the Indonesian ban have pushed nickel CMNI3 prices on the London Metal Exchange (LME) up nearly 40% to around $17,000 a tonne now. In September, they hit a five-year high of $18,850 a tonne.
A spokesman at the mining ministry, which issues regulations on ore exports, said he could not immediately comment.
Lahadalia, who was appointed last week by President Joko Widodo in his new cabinet, said nickel companies agreed not to export ore based on “collective awareness” to create added value to Indonesian resource exports by processing them onshore.
Nickel smelters have been having problems buying raw material for their plants since Indonesia announced it was moving forward the ore export ban to January.
China’s Tsingshan, the biggest smelter operator in Indonesia, will cut production by 20% starting in November due to scarcity of ore and as the rainy season begins, to maintain its levels of ore inventory, said a company official in Jakarta.
Alexander Barus, executive director at PT Indonesia Morowali Industrial Park, Indonesia’s largest nickel industrial park -where Tshingshan operates – said smelters in Morowali were ready to buy ore from miners.
“We will buy according to our stockpile capacity and when the specification and prices are suitable,” Barus said after attending the meeting with the investment agency chief.
Meidy Lengkey, secretary general of Indonesian Nickel Miners Association, told Reuters that miners were fine with the export stoppage as long as the government helps to support domestic ore prices.