Indonesian government doubles down on commitment to nickel smelters, bringing forward nickel ore export ban by two years

On 30 August 2019, the Minister of Energy and Mineral Resources (“MEMR”) issued Regulation No. 11 of 2019 (“MEMR 11/2019”) at the direction of President Jokowi to ensure the continued supply of nickel to develop domestic processing and refining facilities. 

Under the previous regulatory framework, nickel ore with less than 1.7% nickel content could continue to be exported until 11 January 2022, provided the mining concession holder: 

• constructed or was in the process of constructing a refinery facility;
• paid the applicable ore export duty; and
• obtained an export recommendation from the Director General of Minerals and Coal and an export approval from the Director General of Foreign Trade. 

However, the changes introduced by MEMR 11/2019 mean that exports of nickel ore with less than 1.7% nickel content must now end on 31 December 2019. 

With the issuance of MEMR 11/2019, all existing export contracts for nickel ore with less than 1.7% nickel content need to be completed by the end of this year. Nickel ore exporters may therefore need to re-visit their long-term nickel ore sales contracts.