Jakarta, Sept 8 (AFP/APP):Indonesia’s surprise plan to roll out a nickel-ore export ban two years early could scare foreign investors away from Southeast Asia’s biggest economy, analysts say, as it cements a reputation for policy flip-flops.
Nickel prices soared this week on supply concerns after Indonesia, the world’s top producer, announced the ban would start next year instead of 2022 in a bid to process more minerals at home.
Ending exports of bauxite, used to make aluminium, and copper concentrates is still slated for 2022.
The sprawling archipelago has some of the world’s most abundant natural resources. But critics say it repeatedly comes up with poorly thought-out and nationalistic economic policies that make it an uncertain place to invest.
“This decision casts huge doubt in people’s minds about the reliability and consistency of Indonesian government policy,” said Bill Sullivan, a Jakarta-based lawyer and mining expert.
“It’s just a wonderful example of something that plays to the very worst fears of foreign investors… Changing at the drop of a hat and without warning,” he added.
The sped-up timeline has also alarmed some Indonesian miners who thought they had more time before the ban came into effect.
Indonesia implemented an ore export ban in 2014 only to reverse course and relax it in 2017, when the government said companies would have five years to prepare and start building homegrown smelters — which extract base metals from ore.
“There have been so many U-turns it would make your head spin,” Sullivan said.
Indonesian officials said they want to speed up construction of smelters to churn out higher-value products, rather than just shipping raw ore abroad — including to top importer China which uses nickel to make stainless steel.
The move is also key for plans to turn the country into an electric-vehicle hub. Nickel is used in lithium batteries that power gas-free cars.
“The government wants to become a global player and enter the lithium battery supply chain given the raw materials Indonesia has,” Luhut Pandjaitan, coordinating minister overseeing mining, said this week.