On December 21, 2022, President Joko Widodo announced that Indonesia will impose a bauxite export ban starting from June 2023, in a move to shore up the domestic processing of its mineral resources. In this article, we explain what the bauxite export ban is, why Indonesia introduces the bauxite export ban, and what the potential impacts are.

What is the bauxite export ban?
Bauxite is the best and only material for large-scale production of aluminum, a metal that is widely used for aircraft construction, building materials, consumer durables, electronic conductors, and chemical and food-processing equipment.

Indonesia is the world’s sixth-largest bauxite producer and has the fifth-largest reserves, according to a US Geological Survey.

According to President Widodo’s announcement, starting from June 2023, the government will impose a ban on exports of bauxite ore. Moreover, exports of bleached bauxite will also be banned.

Why does Indonesia introduce the bauxite export ban?
Indonesia introduces the bauxite ban to replicate its success in nickel processing after banning the export of raw nickel material in January 2020.

According to Indonesian Chamber of Commerce and Industry chairman Arsjad Rasjid, the export value of the country’s Nickel export reached US$20.9 billion in 2021 and is expected to exceed US$30 billion in 2022, from only US$1.1 billion at the end of 2014. Arsjad believes the export ban can benefit Indonesia’s economy.

Now through the bauxite ban, President Widodo hopes more value can be added domestically, more jobs can be created, more foreign exchange reserves can be increased, and more equitable economic growth can be achieved.

“The government will continue to consistently carry out domestic down streaming so that added value is enjoyed domestically for the progress and welfare of the people,” President Widodo wrote on Facebook on December 21, 2022.

Source : aseanbriefing.com