mining|supply chain|operations

Indonesian nickel smelters turn to Philippines for ore as local supply tightens

30th August 2023

By: Reuters


Font size: - +

Nickel smelters in top producer Indonesia are making rare purchases of ore from the Philippines to ease tight supplies, people familiar with the matter said, upending trade flows of the raw material and pushing up costs across the supply chain.

Jakarta recently delayed the issuing of mining quotas and suspended operations at a key site of state miner Aneka Tambang (Antam) after an investigation into corrupt practices in issuing mining allowances.

While mining at other sites continues and Indonesia, which accounts for half of global mined supply, has said there is no shortage of ore, prices have risen about 8% this week, following a 10% surge a week earlier, local buyers say.

Some firms are now buying ore from neighbouring Philippines, the world's No. 2 supplier, in the event that new mining quotas are further delayed, said three smelter managers, two nickel traders and a Chinese analyst.

All declined to be identified because they were not permitted to disclose the trade information publicly.

"(We) started imports from this month. It is economical," said an official at a major smelter in Indonesia.

The person did not specify how much the smelter is buying but said the purchases are of low-grade limonite ore.

Indonesian miners will prioritise high-grade ore for their limited production quotas, the person added.

Indonesia imported 53 864 metric tons of nickel ore in the first half of 2023, up from 22 503 tons for all of 2022, Indonesian trade data showed.

But imports from the Philippines only started in May, and all arrived at Morowali port in a huge nickel processing park run partly by Chinese nickel giant Tsingshan Group, the Indonesian data showed.

Tsingshan did not respond to a call and email seeking comment.

Volumes in the first half from the Philippines were less than 1 000 tons in nickel content compared to Indonesia's 1.6-million tons mined last year, data from the Indonesian government and the International Nickel Study Group (INSG) showed.

"The ore from the Philippines is generally lower grade than Indonesian material which will push operating costs higher due to lower production from same tonnage of ore," said Wood Mackenzie analyst Andrew Mitchell.

"But the ore is cheaper by comparison with domestic ore currently and so this will offset some of the rising costs," Mitchell said.

Indonesia exported much of its ore before a 2020 ban halted all shipments and attracted billions of dollars worth of investment in nickel smelting, mostly from Chinese companies.

Imports from the Philippines could rise to 100 000 tons for July and August combined because of the supply tightness, according to Chinese consultancy Mysteel.

The Philippines mined 360 000 tons of nickel in ore in 2022, or 11% of global supplies, according to INSG.

Rising demand for ore from the Philippines is also pushing up prices in China, as buyers stock up due to tighter Indonesian supplies and ahead of the rainy season in the Philippines starting in October, said a Chinese trader.

Philippines 1.3% grade ore landed at China's Lianyun port surged 20.6% in the past month to $41 a ton, the highest since March, Mysteel data showed.

Edited by Reuters


Latest News

Linden eyes midtier status
28th November 2023 By: Mariaan Webb



Our Easy Access Chute concept was developed to reduce the risks related to liner maintenance. Currently, replacing wear liners require that...

Sandvik Rock Processing Solutions
Sandvik Rock Processing Solutions

Sandvik Rock Processing Solutions is a leading supplier of equipment, tools, parts, service and solutions for processing rock and minerals in the...


Latest Multimedia

sponsored by

Photo of Martin Creamer
On-The-Air (24/11/2023)
24th November 2023 By: Martin Creamer
A video round up of this week’s magazine, highlighting our cover story, features and Business Leader.
Magazine round up | 24 November 2023
24th November 2023
Photo of Martin Creamer
Renewables, green hydrogen, platinum make headlines
23rd November 2023

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?







sq:0.145 0.178s - 109pq - 2rq
Subscribe Now