So far, Indonesia has been selling bauxite ore raw materials abroad. In fact, around 90% of the bauxite ore is exported to China. However, starting in June 2023, President Jokowi will no longer sell these raw materials.
Jokowi ensured that this step had to be taken to secure Indonesia’s abundant natural resources.
It is known that more than 90% of Indonesia’s bauxite ore is exported to China. According to the records of the Association of Indonesian Mining Experts (Perhapi), Indonesia’s bauxite ore production has reached 40 million tons, of which 6 million tons can only be absorbed for domestic refinery needs. the rest, namely around 35 – 36 million tons of bauxite ore was exported to China.
Chinese industry uses the proceeds from Indonesia’s bauxite ore exports to produce alumina intermediate products in the form of smelter grade alumina (SGA) and chemical grade alumina (CGA).
Perhapi has noted that the ban on bauxite ore exports to China has been going on for decades. Of course, the ban on bauxite exports will be detrimental to China.
“The country that currently imports Indonesian bauxite ore is China. So if the export ban is carried out in 2023, it is certain that China will be the one who will suffer losses because the factories will experience a shortage of bauxite ore stocks to be processed,” explained the Chairman of the Association of Indonesian Mining Experts (Perhapi), Rizal Kasli was quoted Monday (26/12/2022).
However, Indonesia is not the only exporter of bauxite ore to China. Among them are Australia, Brazil, Guinea, and Vietnam. “Indonesia controls 4% of the world’s reserves,” said Rizal.
Thus, the policy of banning the export of bauxite ore will also reduce the country’s foreign exchange yields of between US$1 – US$1.5 billion, depending on global market prices.
In the Decree of the Minister of Energy and Mineral Resources (Kepmen ESDM) Number 301. K/MB.01/MEM.B/2022 concerning the National Mineral and Coal Management Plan for 2022 – 2027 states:
That the bauxite commodity is ranked 6th in the world or equivalent to 4% of world reserves. It is recorded that total bauxite resources reach 6.6 billion tons of ore and 1.1 billion tons of metal, with reserves of 3.2 billion tons of ore and 520 million tons of metal.
In fact, this bauxite also has areas that have not been explored or greenfields. As for the power of the Minerba storefront, among others, the bauxite greenfield area in the Riau Archipelago and West Kalimantan (West Kalimantan) Provinces.
President Jokowi noted that later, as a result of stopping bauxite ore raw exports and developing bauxite downstream in the country, state revenues will experience a significant increase to approximately IDR 62 trillion compared to recent years which reached IDR 21 trillion.
