Jakarta, CNBC Indonesia – RI President Joko Widodo (Jokowi) is back in action. After the nickel, this time it banned the export of bauxite ore abroad starting from June 2023 in accordance with the provisions of the 3 of 2020 Law on Ore and Coal Mining (Minerba).
Unexpectedly, it appears 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) the RI bauxite ore production reached 40 million tons, of which 6 million tons was absorbed only for the internal needs of the refinery, the remaining about 35 -36 million tons were exported to China.
From the export earnings of Indonesian bauxite ore, Chinese industry uses it to produce alumina intermediate products in the form of smelter alumina (SGA) and chemical grade alumina (ACG).
“Which can then be reprocessed into aluminum ingots and chemicals to produce other manufactured products such as vehicle engine blocks, constructions, household appliances,” Perhapi President Rizal Kasli told CNBC Indonesia on Monday (26/12/2022). .
Perhapi noted that China’s bauxite ore export ban has been going on for decades. Naturally, the ban on bauxite exports will be bad for 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).
However, Indonesia is not the only exporter of bauxite ore to China. Among them are Australia, Brazil, Guinea, Vietnam. “Indonesia controls 4% of the world’s reserves,” 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.
In the Decree of the Minister of Energy and Mineral Resources (Kepmen ESDM) Number 301.K/MB.01/MEM.B/2022 concerning the National Plan of Management of Minerals and Coal for 2022 – 2027 it is stated:
That bauxite ranks sixth in the world or equivalent to 4% of world reserves. Total bauxite resources are recorded to 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.
Indeed, this bauxite also has areas that have not been explored either building plot. As for the power of Minerba showcase, among others, the region building plot bauxite in the Riau archipelago and in the provinces of West Kalimantan (West Kalimantan).
President Jokowi noted that later, as a result of the halt of bauxite ore exports and the development of downstream bauxite in the country, state revenues will experience a significant increase to about IDR 62 trillion from last years which reached the IDR 21 trillion.
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(pgr/pgr)
