Domestic Bauxite Absorption Is Still Low Compared to Exports

Bauxite mine

Indonesia is famous for having several areas that productively produce bauxite. These areas are West Kalimantan, Riau, Bangka Belitung, and North Sumatra. Unfortunately, the domestic uptake of bauxite ore is still much smaller than export sales.

It is recorded that there are around 25 million tons of bauxite ore in 2020, but only 1 million of which can be used for domestic industries.

This was confirmed by the Executive Director of the Indonesian Mining Association (IMA), Djoko Widajatno, who said that the production of bauxite ore with a grade of 42 percent in 2020 will reach 25 million tons.

He explained, “The alumina production of 1.1 million tons resulted in 51,000 tons of chemical grade alumina [CGA]. Then domestically supplied with 27,000 tons of smelter grade alumina (SGA).”

This should not happen because the demand for bauxite ore is expected to be higher in the future, especially with the advent of electric vehicles. He is optimistic that this will increase the demand for bauxite in the domestic market.

Regarding electric cars that require bauxite, a study by the Ministry of Energy and Mineral Resources (ESDM) noted that every electric vehicle contains at least 0.25 tons of aluminum.

Commodities come from refined bauxite, to obtain alumina. Then, it is re-melted so that it becomes aluminum. In addition, in the refining process, at least 2 – 3 tons of bauxite are needed to produce one ton of alumina.

In 2019, bauxite ore production in Indonesia was around 19 million tons. Then, about 16.1 million tons were exported. while domestic bauxite reaches 2.9 million tons. Then, 2.9 million tons of bauxite are processed to produce 1.1 million tons of alumina.

This product was exported to the global market as much as 1.08 million tons, but only 46,000 tons were used for domestic needs. Indonesia then had to re-import around 458,000 tons of alumina to produce 250,000 tons of aluminum. On the other hand, domestic demand for aluminum exceeds 1 million tons. This means that the industry must re-import about 748,000 tons of aluminum.

Djoko believes that local producers can increase the uptake of this bauxite ore, but according to him, they still lack confidence. Therefore, all government programs related to this absorption are not running properly.