Indonesia said on Monday it will stop nickel ore exports from January 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 apply 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 three percent to $18,470 a tonne on Monday, its highest in nearly five years, adding to Friday’s nine percent gain.
In Shanghai, nickel prices hit a record high.
Goldman Sachs said in a note on Sunday it expects London nickel prices to reach $20,000 a tonne in three months due to the ban.
Ariyono said the timetable was expedited because of the limited pool of mineable nickel resources.
“The national proven reserve for nickel is only 698 million tonnes, which can only supply smelting facilities for 7.3 years,” he told reporters, adding that Indonesia currently has 11 working smelters with the input capacity of 24 million tonnes 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 promised 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.