President Joko Widodo, also known as Jokowi, has issued an official prohibition on the export of bauxite ore effective from June 10, 2023. This measure is part of Jokowi’s strategy to bolster the domestic bauxite processing and refining industry. The aim is to encourage value addition within the country and enhance economic growth.
Indonesia, being blessed with substantial mineral resources, ranks among the top six countries globally in terms of reserves and production of metallic minerals.
According to the National Mineral and Coal Management Plan for 2022-2027, established by the Minister of Energy and Mineral Resources, Arifin Tasrif, on December 19, 2022, Indonesia’s bauxite reserves and production hold the 6th position worldwide, representing approximately 4 percent of global reserves.
The bauxite resources in Indonesia are quite significant, with a total of 6.6 billion tons of ore and 1.1 billion tons of metal. These reserves consist of 3.2 billion tons of ore and 520 million tons of metal. Additionally, there are untapped greenfield areas, particularly in the Riau Islands Province and West Kalimantan, which present potential investment opportunities for the bauxite sector.
The Indonesian government foresees a surge in demand for bauxite and iron commodities due to the projected growth in the global aluminum market. Therefore, implementing a moratorium on bauxite exports aligns with the provisions of Law No. 3 of 2020, which amends Law No. 4 of 2009 concerning Mineral and Coal Mining (Mining Law).
President Jokowi emphasized the significance of this export ban during his statement on December 21, 2022, stating, “Starting from June 2023, the government will impose a prohibition on bauxite ore exports and actively promote the development of domestic bauxite processing and refining capabilities.”
This move aims to increase the value-added activities within Indonesia’s borders, fostering job creation and advancing the country’s economic interests.
Minister of Energy and Mineral Resources, Arifin Tasrif, shed light on the current state of bauxite smelters in the country. He mentioned that there are presently only four operational bauxite smelters, which have been unable to operate at full capacity due to a shortage of raw material supply.
By optimizing the processing capabilities of these existing smelters, it is estimated that an additional export value of approximately US$1.9 billion can be generated, while creating employment opportunities for around 8,646 individuals.
The downstreaming of bauxite in Indonesia will not only result in substantial economic benefits but also contribute to the broader national agenda of industrial development.
Minister Tasrif emphasized the positive impact, stating, “Through downstreaming activities, the community will reap significant benefits, including an export value of around US$1.5 billion and the creation of employment for approximately 7,600 individuals.”
By enforcing this export ban on bauxite ore, the Indonesian government aims to stimulate domestic processing and refining capacities, capitalize on the country’s vast mineral resources, and ensure sustainable economic growth.
