The economy that is gradually recovering along with the handling of the Covid-19 pandemic is estimated to increase the production and sales of Indonesian mineral products in 2021, including nickel ore.
Secretary General of the Indonesian Nickel Miners Association (APNI) Meidy Katrin Lengkey is optimistic that the covid-19 recovery along with vaccination will improve nickel production and sales performance this year.
As for 2020, the realization of nickel ore sales tosmeltersfrom APNI member companies was recorded at 40 million metric tons, or about 40% of last year’s total Work Plan and Budget (RKAB).
Meidy revealed, nickel ore mining production activities have started to normalize, especially with the increase in nickel mineral prices in recent times.”Of course it will spur nickel mining entrepreneurs to increase production capacity or maximize the existing RKAB quota capacity,” explained Meidy to Kontan.co.id, Monday (15/2).
Currently, the Mineral Reference Price (HPM) for nickel ore in February 2021 for a grade of 1.8% with30%Moisture Content(MC) is set at aFree on Board(FoB) price of US $ 42.74 per metric ton.Meidy projects that the price of nickel ore will continue to increase in line with the price of nickel minerals which also continues to rise.
Regarding this year’s nickel ore production and sales volume target, Meidy has not disclosed any details.To be sure, the production and sales achievements will adjust the input capacity of thesmelter.
Contacted separately, mining andsmelterpractitionerArif S. Tiammar, the current economic and market developments provide positive prospects for demand for mineral and metal commodities.Moreover, the enthusiasm for production and sales of mining products can also be lifted by the momentum of thesupercyclefor some of Indonesia’s mainstay commodities.
In this cycle, the prices of several commodities are on an upward trend in line with the increasing demand for several industries that are highly dependent on mineral and metal supplies.”Thus, the initial prognosis for the production and sales of minerals and metals in Indonesia in 2021 is optimistic that it will increase and be better than last year,” said Arif.
Regarding last year’s production realization, ESDM Ministry’s Mineral Development and Business Director Sugeng Mujiyanto revealed last year’s nickel ore production was recorded at 48 million tons.
He emphasized that according to regulations, nickel ore exports last year had been closed, so that all sales were absorbed by the domestic market.”All nickel ore production since 2020 is required to be sold domestically, not to be exported. For 2021 (production and sales) are expected to increase,” said Sugeng.
Meidy said the economic recovery and the current nickel price trend is a very good sentiment for miners.However, that does not mean that the implementation of the domestic nickel trade system is running without notes.This is because in its implementation there are still manysmeltercompanies, tradersand mining companies that have not complied with the domestic trade system based on HPM.
Meidy also revealed a number of notes to improve the nickel trade system.First, related to FoB prices andCost, Insurance and Freight(CIF) prices.Meidy said, currently the prevailing price is CIF price, not FoB.This results in miners having to bear the cost of transportation or provide subsidies.
The applicable CIF contract is that HPM is mined at US $ 2 per metric ton (MT).”This means that the barge shipping fee paid by thesmeltercompany isonly US $ 2 per MT, while the barging costs from all mines to thesmelter arearound US $ 4-US $ 12 per MT,” explained Meidy.
Due to this condition, APNI asked the government to equalize the barge shipping cost to US $ 6 per MT.That way mining companies with remote locations do not bear too much subsidy costs.
Second, thepenaltypriceis not in accordance with the HPM.Meidy explained thatsmeltercompaniesonly accept nickel ore with a grade above 1.8%, with apenaltycontractif the grade decreases.
APNI also asked the government to be able to arrangepenaltycontractsto match the HPM.”So if there is a decrease in Ni content, thepenaltypriceis in accordance with the HPM,” explained Meidy.
Third, related to therefereesurveyor(umpire).This is becausethere are stillsmeltercompaniesthat do not imposeumpireif there is a decrease in levels.Even though this has been regulated in the Minister of Energy and Mineral Resources Regulation No.11 of 2020.
As a result, when there is a case of difference in level difference (deviation), neither party can make a decision.”This causes the miners to be in a very weak position or lose because they cannot get the final verification results,” continued Meidy.
Fourth, the delay in laboratory analysis results.Currently there are fivesurveyorsto analyze nickel ore.However,smeltercompaniesmostly use Anindya Wiraputra Konsult and Carsurin.
As a result, there was a buildup of analysis bysurveyorsAnindya Wiraputra Konsult and Carsurin who took too long to issue theCertificate of Analysis(CoA) results.This has an impact on business processes, namely late payments.
APNI also requested that the level of analysis test be distributed evenly among the fiveregisteredsurveyors.”So that there will be justice forothersurveyorsand the results of the analysis can be obtained more quickly,” said Meidy.