Supply Chain of Domestic Nickel Ore - Antonius Setyadi
Supply Chain of Domestic Nickel Ore - Antonius Setyadi
Supply Chain of Domestic Nickel Ore - Antonius Setyadi
Background
4. Conclusion
NO PROVINCE NICKEL IUP RESERVES
( OP & Exploration ) ( Ni > 1.4% )
1 SOUTHEAST SULAWESI 528 974.015.930
5 MALUKU 5 82.012.295
7 PAPUA 2 210.000.000
Sources: comtrade.un.org/data
DATA OF CHINA NICKEL IMPORT FROM INDONESIA
Sources: comtrade.un.org/data
Nickel Export >< Nickel Import Indonesia - China
• From January 12, 2014 to January 17, 2017, a ban on nickel exports in Indonesia was enacted.
• However, in that period still recorded export from Indonesia to China and China import from Indonesia
• There is a difference in Indonesia's export data to China and China's imports from Indonesia, as indicated by the table.
Source: comtrade.un.org/data
China is the largest export destination country of Indonesian nickel.
Year Trade Flow Reporter Partner Commodity Code Commodity Netweight (kg) Trade Value (US$)
2014 Export Indonesia World 260400 Nickel ores and concentrates 4.160.120.660 $ 85.913.010,00
2013 Export Indonesia World 260400 Nickel ores and concentrates 64.802.857.120 $ 1.685.247.617,00
2012 Export Indonesia World 260400 Nickel ores and concentrates 48.449.392.135 $ 1.489.084.347,00
2011 Export Indonesia World 260400 Nickel ores & concentrates 40.792.164.833 $ 1.428.040.111,00
2010 Export Indonesia World 260400 Nickel ores & concentrates 17.566.047.388 $ 532.446.129,00
2009 Export Indonesia World 260400 Nickel ores and concentrates 10.437.126.465 $ 277.569.221,00
2008 Export Indonesia World 260400 Nickel ores and concentrates 10.592.151.259 $ 524.259.508,00
2007 Export Indonesia World 260400 Nickel ores and concentrates 9.026.849.686 $ 608.403.873,00
2014 Export Indonesia China 260400 Nickel ores and concentrates 3.989.893.880 $ 82.208.881,00
2013 Export Indonesia China 260400 Nickel ores and concentrates 58.604.651.822 $ 1.447.415.806,00
2012 Export Indonesia China 260400 Nickel ores and concentrates 43.095.682.382 $ 1.252.775.869,00
2011 Export Indonesia China 260400 Nickel ores & concentrates 36.142.280.593 $ 1.162.069.111,00
2010 Export Indonesia China 260400 Nickel ores & concentrates 14.346.464.168 $ 348.397.438,00
2009 Export Indonesia China 260400 Nickel ores and concentrates 7.604.354.011 $ 151.984.288,00
2008 Export Indonesia China 260400 Nickel ores and concentrates 6.594.319.151 $ 230.921.446,00
2007 Export Indonesia China 260400 Nickel ores and concentrates 5.432.401.119 $ 276.170.610,00
On Periode 2007-2014,
China imports from Indonesia = $12.180.560.807
Indonesia exports to China = $ 4.951.943.449
The difference between the value of China’s imports and Indonesia’s exports = $ 7.228.617.358
Sources: UN COMTRADE, Central Bureau of Statistic
Attachment
The volume and value of nickel ore export to various destination countries.
1.7 % USD 15.00 / wmt USD 35.00 / wmt USD 29.62 / wmt
Remark :
1. Local sales price does not match HPM
2. HPM can be used as a LOCAL reference price.
CONCLUSION
The impact of low sales prices in the country:
1. Many companies hold IUPOP and OPK try to get EXPORT QUOTA, because the
export price is higher with low grade.
2. Export sales with low grade < 1.7%
3. The local price is the same when LME 9000 and LME 14.000, not in accordance
to HPM
4. Local demands with grade > 1.8%
5. It’s hard to achieve SUSTAINABLE MINING PRACTICE
6. Miner bear many obligations and taxes.
7. Bad environment impact because no reclamation post mining.
8. No reasonable profit for miners.
9. One of the local smelter factory which operating now earn 10 billions Yuan / 1,5
billion USD / 20 Trillions Rupiah in 2017 (net profit 2017) **sources from China
Nickel conference Data.
10. If 3 of the biggest local smelter require +/- 20 millions wmt/year, then with the
price usd 20/wmt x 20 millions wmt, the profit of those smelter are USD 400
millions (+/-5 trillions) / year
CONCLUSION
The impact of export sales:
11. Many companies earn QUOTA EXPORTS but the source of the nickel ore is not
from the mine it own and use in applying the export quotas and or using
smelter company to buy nickel ore at low price but not for use in smelter but for
export.
12. There are indication that the ore exported is not according to the regulations.
13. The pricing of the Nickel ore exported are manipulated by transfer pricing,
under invoicing.
14. Nickel ore tonnage volume is not suitable due to manipulation of shipping
manifest.
15. Disparity of FOB Nickel selling price of FOB to local compare to FOB for export =
USD 20.00 / wmt
16. Smelter does not pay royalty, but miner must pay royalty.
17. Others operation and owning IUP for good mining practice cost are not stated in
IUI
18. The failure of administrative sanctions in accordance to PERMEN NO. 7 Tahun
2017
SUGGESTION & INPUTS
1. The Government involved in determination of domestic sales price.
2. Fair and transparent transactions for sellers and buyers.
3. Price is adjusted to applicable international market.
4. Reduction of some obligation (Tax / PNBP / Royalty) for miners
5. Domestic buyers are limited to the use nickel nickel grade lower than > 1.7%
6. Suggest to have Nickel Exchange (like Tin Exchange) for trading transaction.
7. So that the Nickel Quota given by the Government more focused on improving
the quality of local nickel miners to be national smelter businessman, not to the
Giant Smelter (Foreign) companies which already operating a long time and do
not need government assistance.
8. HPM issued by the government every month can be used as a reference price.
9. So that nickel commodities to be like coal and other mineral commodities where
government is present to set the pricing.
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