Indonesia considers easing bauxite export ban

Indonesia’s Energy and Mineral Resources Ministry is considering plans to resume bauxite ore exports after the lower house called for a ban on the export of the mineral to be lifted as part of efforts to develop the economies of mining regions.

Mamman Abdulrahman, deputy chairman of the House of Representatives’ Seventh Committee on Energy and Mineral Resources, said the House had proposed to the ministry to replace the ban with an export quota restriction.

Indonesia is banning bauxite and copper exports from June 2023 after applying a similar policy to nickel mining companies in early 2020.

As for bauxite ore, the Indonesian government wants more commodities such as alumina, a key raw material in aluminum production, to be processed domestically. Local mining companies are opposed to the ban, fearing they will be forced to cut production and lay off thousands of workers.

Singgi Widagdo, chairman of the Indonesian Energy and Mining Forum, said because Indonesia does not have much influence on global bauxite prices, the government needs to closely monitor the establishment of domestic bauxite smelters before lifting the export ban.

He asserted that the government must consider industrial development of bauxite derivatives.

Mining companies also point to the asymmetry between domestic bauxite production and current smelter input capacity: at current production levels, an export ban would generate around 17 million tonnes of raw bauxite.

The ministry estimates that domestic bauxite production will reach 31 million tonnes in 2023, significantly exceeding the country’s domestic ore-smelting capacity of just 14 million tonnes.