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Indonesia Confounds Mining Industry With Export Policy Curveball

  • Commodity producer revises export rules in major policy shift
  • Revision is bearish for nickel; state producer Antam benefits

Indonesia’s unexpected mining policy shift is reverberating around the world. As the dust settles, here are four charts showing possible consequences of what Macquarie Group Ltd. called a “very strange move.”

Southeast Asia’s biggest economy on Thursday said it will allow exports of excess nickel ore and bauxite by miners that are building processing plants in the country, easing a ban on unprocessed ore shipments that’s been in place since 2014. While it’s not a complete reversal of the ban, the potential for greater ore exports is bearish for global nickel prices, according to Citigroup Inc. Futures tumbled more than 5 percent in London after the changes were announced, before reversing losses. The bank thinks they could drop as low as $9,500 a metric ton from $10,205 as of 5:46 p.m. in Singapore on Friday.