No Solution! Indonesia Forced to Continue Importing Nickel Ore from the Philippines
Jul 12, 2024
📈 According to Gerber's report on July 10, 2024, the outlook for small and medium-sized enterprises (SMEs) in the United States is quite promising, with earnings growth expected to reach up to 20% for the second quarter. This figure is projected to be even higher in the second half of the year, closely linked to the Federal Reserve's interest rate cut cycle. Analysts predict an increase of 60% to 90% for the third and fourth quarters of 2024.
📉 The issuance of important mining permits in Indonesia has been delayed for several months, leading to a continuous shortage of nickel ore. As a result, due to the lack of raw materials, smelters have had to reduce or even completely halt production. According to media reports, there seems to be no significant improvement in the execution of contracts for June and July, as heard at the hearing held by the Indonesian House of Representatives' seventh committee (DPR) for the affected companies.
🔄 Companies are still forced to import nickel ore from the Philippines to keep the smelters running. A solution to the massive delays seems to be far from sight.
📰 On July 10, 2024, according to Indonesian media, PT Kalimantan Ferroalloy Industries (KFI) is currently importing nickel from the Philippines due to the disruption of domestic nickel ore supply, in order to maintain its smelting business in East Kalimantan.
"We have to purchase from the Philippines because the work plans and budgets for some local mines have not yet been approved (RKAB), preventing us from buying their nickel," said Ardhi Soemargo, the representative of PT KFI's owner, on July 8, 2024, during a hearing with the House of Representatives' seventh committee (DPR). Ardhi assured that before the RKAB incident, all nickel ore used by PT KFI's smelter came from within Indonesia. However, due to the current situation, the company has no choice but to import nickel from the Philippines. Ardhi said: "We have 1,400 employees depending on us; we cannot stop or reduce operations to maintain the factory's operation." To date, PT KFI has imported a ship carrying 51,000 tons of nickel to address the shortage issue. He said: "This import is a temporary measure taken to deal with our current supply shortage." Ardhi pointed out that although PT KFI does not have any mining concessions and only operates a smelter, it is still affected by the delay in RKAB approval. He said: "We buy all nickel from traders, but if a company does not get RKAB approval, traders cannot sell their nickel to us." In response, a member of the House of Representatives' seventh committee, Mulianto, emphasized that the RKAB approval issue may reduce national income. He pointed out that despite efforts to change the frequency of RKAB submission from once a year to once every three years, the problem still exists, leading companies to import from abroad. "This affects our foreign exchange and increases our expenses," Mulianto said.
Content sourced from Gerber's website, does not represent the views of 51BXG. 51BXG does not guarantee the accuracy of software translation and is for reference only. Copyright belongs to the original owner.
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