Nickel supply worries re-emerge on delayed RKAB approval
According to Mysteel survey, only six mining companies have received the RKAB approval as of the writing of this article, and only two of them are able to produce high-grade nickel ore, creating great concerns over the nickel ore supply. And there are more companies awaiting the approval result with indefinite waiting time.
The delay in RKAB approval is reportedly attributed to two causes, including the lack of experienced inspection personnel as the new RKAB rule makes it clear that the inspection personnel are held responsible should there be mistakes in the environment and reserves report, as well as the mining companies failing to pay taxes to the government.
Since the last RKAB approval-induced supply concerns around September 2023 when the Indonesia government initiated an anti-corruption investigation towards the mining companies, some smelters in Indonesia built two months of nickel ore stocks after the approval process resumed in November 2023.
In other words, the nickel market will be materially impacted if the RKAB approval is delayed until the end-February.
Nevertheless, the nerves of the market players have been rattled, in addition to the approaching general election in Indonesia. Some Indonesia NPI plants' order book has exceeded their near-term production capacity.
Source: Mysteel
The RKAB stands for Rencana Kerja dan Anggaran Biaya, or work plan and cost estimates, which is a must-have approval in Indonesia for the mining companies to carry out production and selling businesses normally.
Written by Aggie Hu, huchenying@mysteel.com
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