“Unadulterated” Indonesian Nickel Export Ban Unlikely, Says UBS

Mineweb reported that according to analysts at UBS AG (NYSE:UBS), Indonesia’s ban on the export of nickel ore has a “low likelihood” of happening. The firm believes that a “phased ban that doesn’t put near the same pinch on nickel supply” is more likely.

As quoted in the market news:

UBS sees the government giving ore exporters leeway to continue shipping ore to China so long as they are putting money into nickel processing facilities. Meantime, the government might double export taxes to 40 percent, UBS says.

UBS analysts argue the government might choose this path as it ensures nickel exporting companies still have cash flows to fund the very processing facilities the government wants them to build.

Meantime, “the ruling coalition saves face,” UBS says. “A phased approach avoids the risk of lost jobs and tax revenues a head of parliamentary elections (April 2014) and presidential elections (1^st round July 2014).”

Click here to read the full Mineweb report.