Canada 'very unlikely' to join OPEC-like group for nickel -gov't source

© Reuters. FILE PHOTO: A worker displays nickel ore in a ferronickel smelter owned by state miner Aneka Tambang Tbk at Pomala district, Indonesia, March 30, 2011. REUTERS/Yusuf Ahmad/File Photo

By Steve Scherer

OTTAWA (Reuters) - Canada has not committed to establishing an OPEC-like organization for nickel-producing countries with Indonesia and is "very unlikely" to participate in any such group, a Canadian government source familiar with the discussions said on Thursday.

Indonesia proposed talks with Canada to establish the organization in a meeting between Investment Minister Bahlil Lahadalia and Canadian Trade Minister Mary Ng on the sidelines of the G20 summit in Bali earlier this week.

A statement from Bahlil's office said Ng "welcomed the proposal and the next step for both countries to explore such collaboration opportunity."

"Minister Ng did not commit to exploring this collaboration at this time," said the source who was not authorized to speak on the record. "It is very unlikely we will be doing this (joining an OPEC-like nickel group). Officials expressed high levels of reservation about the Indonesian proposal."

A spokeswoman for the Indonesian investment ministry did not respond to a request for comment made outside of office hours.

Oil companies in many OPEC countries such as Saudi Arabia are owned by the government while in countries such as Nigeria contracts stipulate that government can compel private companies to cut or raise production.

A suggestion for a nickel OPEC had been met coolly by Canadian producers, who said a global cartel would not benefit them.

"Canadian companies are integrated into the North American supply chain and the Canadian resource base is a little bit different," said Canada Nickel Chief Executive Mark Selby. "This proposal is more of a way for Indonesia to capture more value in their own country."

Bahlil said on Wednesday that a group of nickel-producing countries could make sure they get an optimal return from the electric vehicle (EV) industry.

The two ministers did discuss working with "allies such as Indonesia to develop sustainable and resilient global supply chains," said the source.

Indonesia and Canada are the world No. 1 and No. 6 nickel producers, respectively.