Indonesia defied the WTO ruling and insisted on a ban on exports of key commodities

Indonesia defied the WTO ruling and insisted on a ban on exports of key commodities

The World Trade Organisation (WTO) has ruled that Indonesia's ban on nickel exports violates international trade rules. Indonesia's president, Joko Widodo, said he would appeal the ruling and insisted he would press ahead with the development of downstream mining industries. But in his recent address to Indonesia's National Investment Coordination Conference, Mr. Joko said the WTO ruling would not deter Indonesia from developing its determination to process minerals. "Although we lost the case at the WTO on the nickel issue, I have instructed the Minister of Energy and Mineral Resources to appeal.

Mr. Joko reiterated that Indonesia does not want to continue exporting mineral raw materials, but to develop downstream mining industries and create jobs, and may extend the export ban to other mineral raw materials, such as bauxite. "If we shrink from fear of being sued, we will not be able to become a developed country," he said.

Indonesia has the world's largest nickel deposits. According to the US Geological Survey, as of 2020, the world's nickel resources reserves are about 94 million tons, of which Indonesia ranks first with about 21 million tons, accounting for 22%. According to the data released by the US Geological Survey from 2015 to 2020, the global nickel resource reserves increased by about 17 million tons in 5 years, and Indonesia increased by 16.5 million tons.

Indonesia also leads the way in nickel production. In 2020, the world's total nickel ore production is 2.51 million tons, and Indonesia's nickel ore production is 770,000 tons, accounting for 31% of the global total. According to the data released by the US Geological Survey from 2015 to 2020, the global nickel ore output increased by about 230,000 tons in the past five years, and Indonesia's increased by 640,000 tons, accounting for 279% of the global increase.

Indonesia is the world's largest nickel exporter, but banned exports of nickel ore in 2020 to attract foreign companies to develop smelters and downstream industries to increase the value added of the nickel industry. Nickel has good plasticity, corrosion resistance, high temperature resistance, so it is mainly used in the manufacture of steel, nickel-based alloy, electroplating, batteries, currency and so on.

Mr. Joko noted that the ban on the export of raw materials had boosted Indonesia's coffers. In the case of nickel, Indonesia earned 20 trillion rupiah from exporting raw materials, but that revenue soared to 30 trillion rupiah when it was processed and re-exported.

That led to a trade dispute with the European Union. The EU complained to the WTO in 2021 about Indonesia's ban on nickel ore exports, saying it unfairly restricted European stainless steel producers' access to nickel and other commodities. The WTO has yet to issue a formal ruling, but Indonesia's Ministry of Energy and Mineral Resources confirmed on November 21st that Indonesia had lost the case.

Mr Joko said in September that Indonesia was likely to lose a trade dispute with the European Union over a 2020 ban on nickel exports. Mr Joko said that regardless of the WTO's decision in the dispute, Indonesia would press ahead with plans to impose similar bans on exports of other raw materials such as raw copper, bauxite and tin to encourage foreign investment and help it move up the resource processing value chain.

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