Indonesia bans mineral ore exports

Jakarta - Indonesia, among the world's biggest suppliers of natural resources, has halted all mineral ore exports to try to promote domestic processing, but threatening the country's nickel and bauxite industries worth more than $2bn in annual shipments.

Halting exports of nickel ore could spark the biggest shake-up in the global nickel industry in more than five years, with Chinese stainless steel factories that make everything from kitchenware to cars and buildings set to hurt the most.

Concentrates

In one of his most far-reaching economic policy decisions since taking office nearly 10 years ago, President Susilo Bambang Yudhoyono approved the mineral ore export ban.

But in last minute changes at the weekend, he diluted it to allow exports of copper, iron ore, lead and zinc concentrates to continue, giving a reprieve to US mining giants Freeport McMoRan Copper & Gold and Newmont Mining, which together produce 97% of Indonesia's copper.

No such relief was offered to the nickel and bauxite industries, clouding the future for state-owned nickel miner PT Perusahaan Perseroan Aneka Tambang (Antam) and hundreds of other smaller miners.

"Minerals that have to be refined before export are bauxite, nickel, tin, chromium, gold and silver because they don't have intermediate products," said the director general of coal and minerals at the ministry.

Investor confidence

The long-planned ban hopes to eventually boost Indonesia's profits from its mineral wealth by forcing miners to process their ores before export, but officials fear a short-term cut in foreign revenue could widen the current account deficit, which has undermined investor confidence and battered the currency.

Indonesia is also the world's biggest exporter of refined tin and thermal coal and home to the fifth largest copper mine and top gold mine.

Mineral shipments totalled $10.4bn in 2012, around 5% of total exports, according to the World Bank.