October 29, 2019 / 1:00 PM / 17 days ago

UPDATE 1-Indonesia nickel ore exports may resume after 1-2 week investigation -minister

* Govt halts exports to investigate “massive violations”

* Anti-corruption agency to be involved in nickel investigation

* Official ore exports ban kept at Jan. 2020 (Adds details)

JAKARTA, Oct 29 (Reuters) - Indonesia could resume nickel ore exports in one to two weeks once an investigation into “massive violations” of export rules has been completed, Luhut Pandjaitan, coordinating minister overseeing maritime and mining, told reporters on Tuesday.

Pandjaitan said exports of nickel ore had surged since September when the government announced it was moving forward a ban on ore exports to January 2020 from 2022.

“We are evaluating this. For the time being we are stopping exports while integrated inspections are carried out,” he told reporters.

Authorities are investigating reports of manipulation that is resulting in large scale exports of high-grade nickel ore, as well as other irregularities, Pandjaitan said.

Indonesia only allows exports of ore with less than 1.7% nickel content and only issues export quotas to companies that are building smelters onshore as it aims to develop the country’s downstream nickel industries.

Exports of nickel ore have jumped to nearly three times the normal monthly shipment level since Indonesia announced its export ban was being expedited, he said.

The government has asked Indonesia’s anti-corruption agency to be involved in the review.

Exports may resume after one to two weeks of evaluation, Pandjaitan said.

Energy and Mineral Resources Minister Arifin Tasrif said the official ban on ore exports was still set for January 2020 but the ministry will stop issuing export quota recommendations while the investigation is carried out.

Nickel miners, after meeting with the head of Indonesia’s Investment Coordinating Board (BKPM) on Monday, agreed to stop exporting nickel ore immediately, BKPM chief Bahlil Lahadalia said.

Domestic nickel smelters have agreed to buy ore from miners at “international prices” during the pause in exports, Pandjaitan said.

Alexander Barus, executive director at PT Indonesia Morowali Industrial Park, Indonesia’s largest nickel industrial park where Chinese giant Tshingshan operates, said the two biggest smelting groups in Indonesia currently have a combined annual input capacity of around 40 million tonnes of ore.

He added that smelters in Morowali are ready to buy nickel ores, subject to storage capacity, specification and pricing. (Reporting by Bernadette Christina Munthe, Wilda Asmarini Writing by Fransiska Nangoy Editing by Louise Heavens and Kirsten Donovan)

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