JAKARTA -- Shares in miners and metal producers have swung wildly as Indonesia's relaxing its nickel export ban raised hopes about their business prospects as well as concerns over falling prices of the metal.
Indonesia was once the world's largest producer of nickel, which is used in stainless steel. The government uniformly banned exporting the unprocessed ore in 2014, seeking to support the nation's smelting industry, but eased that ban Jan. 12 to boost government income and hiring.
The country now lets miners export excess nickel as long as they dedicate at least 30% of their smelter capacity to processing low-grade nickel ore. And foreign-owned enterprises in the business are required to sell 51% of their stock to the government or a domestic company within 10 years, among other conditions.
The share price rose 6% for Aneka Tambang, a state-owned producer of nonferrous metals better known as Antam, to close at 920 rupiah Jan. 13, the day after Jakarta eased the ban. But the stock has since fallen to close Tuesday at 800 rupiah -- down 8% from before the ban was relaxed -- on fears that prices of the metal would decline worldwide. Shares of Vale Indonesia, local arm of Brazilian mining giant Vale, have plunged almost 20% since the ban was eased.
Nickel prices have already slumped on the economic slowdown in China, the largest consumer of the metal. Prices could sag further if Indonesia begins exporting at full tilt again.