Nickel smelter deals expected during Xi Jinping's Jakarta trip
At least four Chinese-backed Indonesian nickel smelter projects, including one worth at least US$3 billion, are expected to be announced during President Xi Jinping's state visit to Jakarta next week, executives said.
Indonesia is the world's top exporter of nickel ore, a key component of stainless steel, and exports have increased this year ahead of a planned ore export ban next year.
Xi will meet his Indonesian counterpart, Susilo Bambang Yudhoyono, on Wednesday and Thursday, with the two leaders expected to sign a multi-billion-dollar economic co-operation agreement.
"There are seven to eight Chinese nickel companies that have committed to build nickel smelters in Indonesia," Pan Guocheng, CEO of iron ore miner China Hanking, said on the sidelines of a metals conference this week. "There are only three or four companies who have started to construct the plants."
In addition to a smelter being built by China Hanking, the agreement will include a US$3 billion nickel smelter project currently being built on Sulawesi by a joint venture that includes Tsingshan Group, said Li Yao, a senior sales manager at the Chinese firm.
Indonesian policymakers are scrambling to ease nationalistic resource rules that threaten to slash mining exports from January and potentially widen a current account deficit already at a near-record high.
Among the policies the government is reconsidering are the pending ban on mineral ore exports, a royalty rise and export tax on coal.
One option being discussed is to allow limited exports from companies that have already made investments or signed agreements to process ore domestically, such as Perusahaan Perseroan Aneka Tambang (Antam).