To quote my email box, WTF...are they mad: Indonesia Gives Details on Its Mineral Export Ban Rules Clarified to Allow Exporting Six Forms of Concentrate
For all us long on Nickel etc...LME broke its trend to trade late and the prices moved $15/pt very quickly in midday trades, today now there is clarity there should be some way to go yet. The concern for Indonesia should be the amount of small miners it'll put out of business. Its clear they have no consideration for those miners whom cannot afford to pony up 'smelter' monies.
I still have this view Indonesia will get assurances from producers to agree to build Smelters then relax the laws to allow sufficient time to implement the policy for Nickel in exchange for higher taxes. Afterall, the risks involved with financing means Indonesia is cutting its nose off to spite its face. So Indonesia needs to finance smelters and believe International / Foreign Investors will assist with this. Really...With the taxation increasing it adds additional risks.
The saga goes on, I envisage some manoeuvring pre-9th July elections, you could argue relaxing the rules will be a vote winner?
Atb Fraser
Fraser- I have heard that they have excluded 60 mining companies, including the big ones, from the ban, as they have committed to getting smelters built and the 2017 deadline for smelter operation seems to have been dropped, so I wonder what proportion of the nickel exports these guys represent and indeed if this is true, as I seem to have 3 or 4 versions of the final agreement and there is a slight chaotic smell here. Any views??
ReplyDeleteCheers. The Leggie
Leggie, from my understanding there is no exemption on Nickel or Bauxite currently, it either has to be processed or not exported...that simple. So only time will tell and its clear Indonesia believe they have leverage on their Nickel quality and % of world market.
ReplyDeleteWhat the Indonesian Government haven’t realised is Chinese buyers/producers are now shifting their reliance away from Indonesia to derisk any further issues. This will be a long-term trend, so Indonesia now not only risk their own employment issues, but buyers going to 'more reliable supply chains.' Chinese buyers were able to do this by stockpiling such quantities that their shift to other suppliers isn’t so urgent. Bauxite stocks in China are running at 10-12 months contrary to any Indonesian news flow (Thanks Chang).
Time will tell, but I still maintain their will be a legal commitment to build a smelter plus additional taxation. This won't come until Nickel has established a higher price in my opinion.
Atb Fraser
Fraser- thanks for getting back to me- another fine piece of financial mismanagement from Baldricks playbook - ROI are getting a reputation for shooting themselves in the foot. Still its a good opportunity for those outside the country to exploit and ROI may find it hard to get this business back as easily as it is throwing it away now.
ReplyDeleteCheers. The Leggie
Fraser i wonder what the shorters views are on Churchill Mining? Do you think they've educated themselves better? Cheers John keep up the good work.
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