April 23, 2020 / 6:18 AM / a month ago

Indonesia issues rules putting floor price on nickel ore

JAKARTA, April 23 (Reuters) - Indonesia’s Energy and Mineral Resources Ministry has revised regulations on the pricing of minerals, including putting a floor price on nickel ore, Bambang Gatot Ariyono, director general of coal and minerals, said on Thursday.

The rules are aimed at preventing local smelting companies from buying ore at prices that are too low, especially after the country banned exports of nickel ore.

The revised regulations were signed on April 14 but made public only on Thursday, and will take effect starting May 14.

Under the new rules, a monthly mineral benchmark price set by the ministry will be used as floor price for nickel ore transactions, according to the regulation document seen by Reuters.

The ministry will allow for a price at maximum 3% below the floor price, the document said.

Indonesia, a major nickel producer, stopped exports of nickel ore in January as it aims to establish a fully integrated industry at home by processing the ore into metals and chemical used in batteries for electric vehicles.

Prior to the export ban, miners have said that prices paid by local smelters were too low, below the ministry’s benchmark price, which is also used by the government to calculate royalties that miners have to pay. (Reporting by Wilda Asmarini Writing by Fransiska Nangoy; Editing by Krishna Chandra Eluri)

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