Jakarta, CNBC Indonesia – Indonesian President Joko Widodo (Jokowi) has officially banned exports of bauxite ore overseas as of June 2023. The ban on bauxite ore strengthens the provisions of Law No. 3 of 2020 on Ore and Coal Mining (Minerba ).
Jokowi’s declared export ban should no longer be news. This is because goods such as bauxite and copper according to the provisions cannot be exported after the entry into force of the Minerba Law within three years or the period from 2020 to 2023.
The interesting thing is that the ban on bauxite exports emphasized by President Jokowi will create hardships for the Chinese state, why? This is because over 90% of bauxite ore is exported to China.
“The country that currently imports Indonesian bauxite ore is China. So, if the export ban is implemented in 2023, it is certain that China will be the one who will suffer losses because the factories will face a shortage of stocks of bauxite ore to process,” explained the president of the Association of Indonesian Mining Experts (Perhapi), Rizal Kasli on CNBC Indonesia, Monday (26/12/2022).
This ban will really inconvenience China, but Indonesia is not the only country exporting bauxite ore to China. Among them are Australia, Brazil, Guinea, Vietnam. “Indonesia controls 4% of the world’s reserves,” Rizal said.
Perhapi noted that Indonesia’s annual bauxite ore production reaches about 40 million tons. Where, 6 million tons are absorbed by domestic refineries, while for China’s industrial needs it reaches 35-36 million tons.
From Indonesia’s bauxite ore export earnings, Chinese industry uses it to produce intermediate products (e.g.intermediate product) alumina in the form of foundry grade alumina (SGA) and chemical grade alumina (CGA).
“This can then be reworked into aluminum ingots and chemicals to produce other manufactured products such as vehicle engine blocks, construction, household appliances,” Rizal said.
Thus, the bauxite ore export ban policy will also reduce the country’s foreign exchange yields by between US$1 and US$1.5 billion, depending on global market prices.
However, President Jokowi is not afraid. Subsequently, from downstream bauxite, government revenues will significantly increase. President Jokowi noted that since the industrialization of bauxite in the country, state revenues could skyrocket to around IDR 62 trillion compared to recent years which reached IDR 21 trillion.
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(pgr/pgr)
