Indonesia to impose a ban on bauxite ore exports

Jakarta, The Gulf Observer: Following the government’s decision to stop raw bauxite exports from June 2023, Coordinating Minister for Economic Affairs Airlangga Hartarto has said that Indonesia has adequate capability and industry readiness to process bauxite ore.

“Regarding the domestic industry, we already have four bauxite refining facilities, with alumina capacity reaching 4.3 million tons,” Hartarto said while accompanying President Joko Widodo (Jokowi), who announced the end of bauxite ore exports at Merdeka Palace here on Wednesday.

The refining facilities that are under development would have an input capacity of 27.41 million tons and a production capacity of 4.98 million tons, he added.

“We have 3.2 billion (tons of) bauxite reserves, which could satisfy (demand for) 41.5-million tons capacity (facilities). Of the eight smelters we prepare, we are capable to (accommodate) another 12 smelters, and our bauxite reserves are enough for 90–100 years,” the coordinating minister expounded.

Hartarto said that bauxite ore will be processed into alumina, and again into aluminium or aluminium ore. The aluminium will be processed into bars or sheets, and the final product will be used for machinery and construction industries, he added.

Earlier, President Joko Widodo announced that the government has decided to stop exporting bauxite ore from June 2023.

“Starting in June 2023, the government will impose a ban on bauxite ore exports and encourage the domestic bauxite processing and refining industry,” the President announced.

He emphasized that the government is committed to realizing sovereignty over natural resources and increasing commodities’ added value domestically to open new jobs for people, increase foreign exchange revenues, and achieve equitable economic growth.

“Hence, the government is committed to improving the domestic natural resources processing industry. We will reduce the export of raw materials and encourage the domestic natural resources downstreaming industry,” Widodo said.

The President underscored that the earlier ban on nickel ore exports, which was initiated in 2020, helped increase national revenue on account of the added value generated.

Indonesia successfully earned US$20.9 billion in revenue from the commodity by the end of 2021 compared to only US$1.1 billion in 2014, he noted.