Indonesia to appeal WTO nickel trade ruling

Indonesia to appeal WTO nickel trade ruling

Indonesia’s president, Joko Widodo, revealed his country would appeal a trade dispute ruling brought forward by the European Union (EU) relating to Indonesia’s 2020 nickel ore export ban.

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A case against Indonesia had been put forward by the EU to the World Trade Organisation (WTO) stating that the country’s export ban unfairly limits the access of EU stainless steel producers to nickel and other commodities. The WTO has not yet publicly released its ruling, however, the Indonesian president conceded that it had gone in favour of the EU and that his country would make an appeal.

Indonesia first implemented a ban on the export of unprocessed nickel ores and concentrates in January 2014 in a move to incentivise investment in downstream processing capacity. Since then, there has been massive investment in the country to develop an integrated stainless steel industry as well as capacity to produce battery-grade nickel. As a result, the country is now the world’s largest producer of refined nickel.

Whilst conceding the ruling, the Indonesian president remained defiant that it would maintain its tough stance on exporting raw materials in favour of adding value. Authorities are now keen to replicate the success of its nickel ore export ban for other important raw materials including bauxite, tin and copper. However, a key reason why Indonesia was so successful and could afford to be especially aggressive with its nickel ore export policy is that it boasts the world’s largest nickel reserves. Prior to the export ban, the country was a key supplier of nickel ore to Chinese nickel pig iron (NPI) to feed its stainless steel industry. The removal of these nickel units from the market led to a massive shortfall, which could not be replaced elsewhere.

Given that Indonesia does not dominate resources for bauxite, copper and tin, it is hard to imagine that export bans for these commodities would yield such similar success to nickel.

  • 02 Dec 2022
  • Indonesia
  • Nickel

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