Will Judges Here Decide The Fate of Copper Prices?

We got a quick update to a very important mining story this week.

Indonesia’s impending ban on exports of unprocessed mineral concentrates.

I wrote a few weeks ago about how this legislation could be one of the biggest drivers for metals price in 2014. Especially for nickel and copper–with the rules potentially jeopardizing 1 billion pounds of annual copper production currently produced by Indonesian miners.

Those firms however, are trying everything they can to avoid a supply disruption. Reports emerging this week suggest that the Indonesian Mining Association will go to Indonesia’s Supreme Court today. And ask judges to provide interpretation over the proposed laws–and the resulting effects on mined production in the country.

This is one of a few last-ditch attempts currently being attempted to prevent a big disruption in Indonesia’s mineral exports. If the Court allows the law to stand, miners will be facing a complete shut-down of unprocessed ore shipments. Starting January 12.

Local press have also reported that the Indonesian government is working on pro-mining amendments to the rules. But such measures have already been tried once, and defeated in the Indonesian House of Representatives. There’s no guarantee that new patches will fair any better this time around.

It thus appears that this week’s court proceedings may be the best–and perhaps only–shot for miners to avoid the export ban. If they’re unsuccessful in revamping the laws, they’ll be forced to build new processing facilities to upgrade ore in-country. And the world will be without Indonesian metal supply until they do.

This is a big decision. One that may dictate the direction of base metals prices for the next several months.

Here’s to making the right call,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook

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