Indonesia nickel ore processing stable amid floods

Nickel processing at most plants in Sulawesi, Indonesia, has been unaffected by heavy rain and flooding over the past week despite disruptions to mining.

Indonesia is the largest nickel ore producer in the world and the Sulawesi island is the main producing region in the country. Indonesia exported 20.72mn t of nickel ore and ferro-nickel last year. The bulk of this, 19.9mn t, was delivered to China to feed the country's stainless steel industry, trade data show.

Sulawesi has been battered by heavy rainfall since early June, flooding a number of the island's provinces. Although rain was anticipated, the severity exceeded expectations.

Local mining firms PT Vale Indonesia and PT Aneka Tambang are operate nickel mines on the island. Nickel ore processing plants in the Indonesia Morowali Industrial Park (IMIP) in Sulawesi are still operating.

"Operations at IMIP are running normally. We have to work harder to [prepare] for our daily needs. But [this is] under control," a spokesman from IMIP said.

The lack of production during the Islamic fasting month of Ramadan, which ended earlier this month, is likely to limit the impact of the flooding, an Indonesian ferro-nickel producer said. The mining sector reduced activity during the fasting month, while public holidays for Eid at the end of Ramadan took place over 1-7 June.

The three-month nickel contract on the London Metal Exchange fell to $11,775/t today, down from $11,900/t on 3 June.