In January Indonesia banned the export of unprocessed nickel and bauxite ore with a view to moving up the production chain with its own smelting industry. Some miners have been given an exemption from the ban till 2017 to build up processing facilities.
By far the largest importer of ore from Indonesia is China, with a trade of roughly 110m tonnes a year.
Ralph Leszczynski, head of the research department for Banchero Costa & Co, said the Chinese had invested in their own smelters. “They will probably try very hard to find other sources of ore so they can use their own smelters,” he told the Mare Forum Indonesia 2014 conference on Wednesday.
Jayendu Krishna, senior manager, Drewry Shipping Consultants, noted that countries earned less from the export of raw materials than if they had been processed, and that “from an Indonesian perspective it was a sound policy”.
He also noted that China was already taking an interest in the possibility of importing ore from West Africa, which would increase the tonne miles. “This ban should have a positive impact on the shipping market overall.”
Slyvester Wong, director of Nam Cheong Pioneer believes China will invest and thay the Tianjin city government had said they had the money to invest in smelters in Indonesia. “The Chinese are not are afraid of investing.”
Leszczynski said though that even if China invests in smelters shipping volumes will fall as processed ore is much smaller in quantity that the raw material. “From a shipping point of view it’s certainly a negative development,” he said.
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