China’s Virtue Dragon, other Nickel smelter firms may sue Indonesian government: executive

Chinese nickel smelter operator Virtue Dragon Nickel Industry and other companies are considering suing the Indonesian government over its new mining rules, a senior executive at Virtue Dragon told Reuters on Friday.

Indonesia imposed a ban on unprocessed ore exports in 2014 to spur higher value smelting industries, but on Thursday the government unveiled sweeping new rules allowing the export of nickel ore and bauxite under certain conditions.

“Indeed we will sue,…but we and our smelter friends are reviewing the legal steps that we will take,” Virtue Dragon’s general manager Rudi Rusmadi said by telephone, when asked if the company planned to sue.

“This is an inconsistent attitude from the government,” Rusmadi said, adding that Virtue Dragon had invested 6 trillion rupiah to 7 trillion rupiah ($450 million to $525 million) to build smelters in Indonesia.

As a result of the government’s latest policy shift, Virtue Dragon, a unit of China’s De Long Nickel Co Ltd, is putting on hold expansion plans worth 25 trillion rupiah ($1.9 billion) in Indonesia, Rusmadi said.

Jonatan Handojo, executive director of the Processing and Smelting Companies Association, estimated on Thursday that Chinese companies have invested around $15 billion in developing smelters that are already in operation.


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