Indonesian miners may export up to 5.2 million tonnes of nickel ore a year under the country's new rules, the mining minister said on Saturday, only a fraction of its shipments when it was once a top global supplier of the stainless steel material.
Energy and Mineral Resources Minister Ignasius Jonan's comment came after an industry backlash to the government's decision on Thursday to reverse a ban on the export of nickel ore and bauxite under certain conditions.
Nickel prices and the shares of companies that had heavily invested in smelters tumbled after the news, as analysts said the resumption of nickel ore exports from Indonesia could flood global markets and wreck prices.
Senior mining officials defended the new rules, saying that the amount of nickel ore that can be exported must correspond to the miners' smelter capacity and that it will be "comparable".
"It's not like they build small smelters and export as much as they can. No, we are going to regulate that," the deputy mining minister, Arcandra Tahar, told reporters.
The government banned the export of nickel ore and bauxite in 2014 in order to spur higher-value processing of mineral ores. A year before the ban kicked in, Indonesia exported around 60 million tonnes of nickel ore.
The ban cost Southeast Asia's biggest economy billions of dollars in lost revenue and led to job losses, as many miners laid off their workers.
The Philippines took Indonesia's crown as the world's top nickel ore exporter, accounting for around one-quarter of the world's mined nickel supply, although its government had since restricted output due to environmental concerns.
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