Indonesia has confirmed it will ban exports of nickel ore from January 2020 – two years earlier than expected.
The Southeast Asian nation is the world’s largest nickel ore producer, and the news unleashed a torrent of speculation about supply shortages. Three-month nickel contracts on the London Metal Exchange (LME) surged as high as US$18,850 – a five-year peak – on Sept. 2.
While 70% of the world’s nickel goes into stainless steel production, the metal is becoming increasingly important as an ingredient in the cathode part of lithium-ion rechargeable batteries in the emerging electric vehicle market, an industry Indonesia wants to develop.
“The government decided — after weighing all the pros and cons — that we want to expedite smelter building,” Bambang Gatot Ariyono, director general for minerals and coal at the Energy and Mineral Resources Ministry, told reporters in Jakarta. “So we took the initiative to stop exports of nickel ores of all quality.
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