Indonesia is to immediately suspend nickel ore exports rather than stopping overseas shipments early next year, officials said yesterday, as the world’s top producer of the mineral looks to ramp up processing at home to increase its income.
About three dozen firms on Monday met government officials and agreed to stop exporting the metal, the Indonesian Investment Coordinating Board said.
London nickel prices briefly jumped to more than US$17,000 a tonne.
Photo: AFP
The surprise announcement came about a month after resource-rich Indonesia shocked markets by saying that it would roll out a planned nickel-ore export ban two years early.
Jakarta implemented an ore export ban in 2014 only to reverse course and relax it in 2017, when the government said that companies would have five years to prepare and start building homegrown smelters — which extract base metals from ore.
The government said that the decision was aimed at speeding up smelter construction in the country, which has almost one-quarter of all nickel reserves, valued at about US$350 billion.
“The meeting was held in order to take concrete action to speed up investment in the smelter sector,” the government said in a statement yesterday, as it confirmed the suspension.
Indonesia’s previously revised timeline, which would have seen the export ban ushered in early next year rather than in 2022, was criticized by some for cementing the country’s reputation for policy flip-flops.
Indonesian officials have said that they want to churn out higher-value mining products, rather than just shipping raw ore abroad — including to top importer China, which uses nickel to make stainless steel.
The move is also crucial for plans to turn the country into an electric-vehicle hub. Nickel is used in lithium batteries that power gas-free vehicles.
The Southeast Asian nation has been courting automakers to invest in electric-vehicle facilities, including Toyota Motor Corp and South Korea’s Hyundai Motor Co.
Some foreign firms are investing in nickel-battery processing plants in Indonesia, including China’s Tsingshan Holding Group Co (青山控股), while construction is under way on about two dozen domestic smelters, the Indonesian government said.
Separately, a global slowdown and a US-China trade dispute have created an environment in which “low interest rates for longer” is the new normal, Bank Indonesia Governor Perry Warjiyo said.
The trade dispute “isn’t helping anybody” and only serves as a reminder that “if you prolong the game of thrones, the kingdom will fall apart,” Warjiyo told a conference in Jakarta yesterday, referring to the fantasy TV series. “Many central banks have become more dovish. Lower interest rates for longer, this is the tagline we now know.”
While Southeast Asia’s biggest economy has been hovering at about a 5 percent growth level for several years, policymakers have become increasingly worried about spillover effects from the trade spat.
Bank Indonesia, which last week cut its key rate for a fourth consecutive month, expects the economy to grow 5.05 percent this year before accelerating toward 5.3 percent next year.
Additional reporting by Bloomberg
AI REVOLUTION: The event is to take place from Wednesday to Friday at the Taipei Nangang Exhibition Center’s halls 1 and 2 and would feature more than 1,100 exhibitors Semicon Taiwan, an annual international semiconductor exhibition, would bring leaders from the world’s top technology firms to Taipei this year, the event organizer said. The CEO Summit is to feature nine global leaders from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), ASE Technology Holding Co (ASE, 日月光投控), Applied Materials Inc, Google, Samsung Electronics Co, SK Hynix Inc, Microsoft Corp, Interuniversity Microelectronic Centre and Marvell Technology Group Ltd, SEMI said in a news release last week. The top executives would delve into how semiconductors are positioned as the driving force behind global technological innovation amid the artificial intelligence (AI) revolution, the organizer said. Among them,
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
RSS