Likely winners, losers of Indonesia's mineral export ban

Reuters - Indonesia is this week expected to announce a new regulation that could exempt some miners from a planned mineral export ban, which will come into effect on Sunday.

The Indonesian Mining Association said it was told by the government the new regulation would exempt mining companies, like U.S. giants Freeport-McMoRan Copper & Gold and Newmont Mining Corp, that already process or plan to process their ore domestically.

"Any company that has processed and refined ore will be allowed to export," said Syahrir Abubakar, the group's executive director, on the sidelines of a private meeting between government and industry officials on the regulation.

"However, it has to be clear the definition of (minimum) 'processing' and 'refining'."

Government officials declined to confirm details of the pending regulation.

More than 250 mining companies have committed to processing and refining minerals domestically, but government officials said only 178 appeared to be serious about building smelters - and among them only around 25 had actually started work.

Following is a list of potential winners and losers of Indonesia's mineral export ban if the government decides to allow companies that process some of their ore domestically to continue exporting without significant restrictions.

WINNERS - COPPER PRODUCERS

Copper output in 2012: 448,000 tonnes

Industry: Freeport, Newmont produce 97 pct of total output

Firms likely to be exempt: Freeport, Newmont

* Freeport McMoRan Copper & Gold currently processes around 40 percent of its ore mined domestically at PT Smelting, Indonesia's only copper smelter that can produce more than 300,000 tonnes of copper cathode. Freeport exports the rest.

The U.S. company produces 73 percent of Indonesia's copper production, or around 220,000 tonnes of copper ore a day at its Grasberg mine in Papua.

* Newmont Mining Corp sends between 20-23 percent of its copper concentrate production from its Batu Hijau mine for processing at PT Smelting.

Newmont produces around 24 percent of Indonesia's copper production. A company official in September forecast copper output between 75-90 million pounds in 2013, compared to 76 million pounds last year.

WINNERS - NICKEL MINERS PT ANTAM, PT VALE INDONESIA

Nickel ore output in 2012: 41 million tonnes

Industry: PT Antam is the top Indonesian producer in both minerals, but there are hundreds of other nickel miners.

* PT Aneka Tambang (Antam) processes around 15 percent of its nickel ore domestically at its ferronickel smelter in Sulawesi.

The state-owned company produced around 9.4 million tonnes of nickel ore in 2012, or around 23 percent of Indonesia's total output.

* PT Vale Indonesia processes all of its nickel ore domestically, producing an estimated 77,000 tonnes of nickel matte in 2013.

MIXED - GLOBAL NICKEL MARKET

* Global nickel miners Norilsk Nickel, Eramet , Glencore Xstrata and others could benefit as importers of Indonesian nickel ore scramble to find other suppliers, analysts say.

* Global nickel prices, however, are not expected to see a significant increase from an Indonesian ban due to sufficient international supplies.

* World nickel consumption was 1.658 million tonnes in 2012, compared with output of 1.753 million tonnes, data from the Lisbon-based International Nickel Study Group showed last month.

LOSERS - HUNDREDS OF SMALLER NICKEL, BAUXITE MINERS

* Most Indonesian nickel and bauxite miners can't afford to invest the hundreds of millions of dollars it takes to build a smelter, so are not expected to receive exemptions to the government regulation.

* Indonesia's Mining Association has warned that the ban will force small mining companies to shutdown operations and lay off thousands of workers.

LOSERS - PORTS, SHIPPING COMPANIES, ORE TRADERS

* Intermediaries handling the transportation and trade of Indonesia's metal ore will be negatively affected as the volume of exports plummet, analysts say.