Indonesia to Ban Bauxite Ore Exports in 2023: Minister

TEMPO.CO, Jakarta - Minister of Investment and head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia on Wednesday announced the Indonesian government's plan to ban bauxite ore exports in 2023.

He made the announcement in front of a number of investors at the Indonesian Pavilion at the 2023 World Economic Forum (WEF) Annual Meeting in Davos, Switzerland.

"Even though we lost at the World Trade Organization (WTO) regarding bauxite ore export, we fought again and we inform that this year, the Indonesian government has decided to ban the export of bauxite ore," he informed while making a presentation during a panel session on "Indonesia Economic Development Through Downstream Industries and Inclusive Partnership,” which was followed from Jakarta on Wednesday.

Lahadalia also called for understanding because the Indonesian government has adopted this policy in order to encourage domestic downstreaming.

"Even if this case will be brought to the WTO, we will be fine because we have learned from other developing countries," he added.

He alluded to how a number of developed countries used to do the same thing to support their domestic industries.

For example, England, which, in the 16th century, banned the export of wool because it wanted to use the raw material for textiles.

A similar step was taken by China in the 1980s when the government applied a domestic component level (TKDN) requirement of up to 90 percent for products to protect its industry.

"No one is stopping them either. Indonesia and developing countries are eager to reach the same results with the developed countries. This is what we are doing now," he emphasized.

The minister said that the lawsuit at the WTO against Indonesia by the European Union was actually not a big problem. This is because the government is well aware that downstreaming is a way to raise the country’s status from a developing country to a developed one.

"Indonesia is very concerned about the sustainable development goals (SDGs) and aims to achieve them by 2030. The SDGs should not only be focused in the environmental sector but also on the distribution of economic growth where there are natural resource areas," he disclosed.

He also emphasized that the Indonesian people must receive optimal benefits through collaboration in economic growth.

Earlier, President Joko Widodo announced that Indonesia will stop exporting bauxite ore starting June 2023 to encourage the domestic processing industry.

"Starting in June 2023, the government will impose a ban on bauxite ore exports and encourage the domestic bauxite processing and refining industry," he said.

Coordinating Minister for Economic Affairs Airlangga Hartarto explained that currently, there are four existing bauxite refining facilities with an alumina capacity of 4.3 million tons.

Indonesia also has a bauxite refining facility that is still under construction with an input capacity of 27.41 million tons and a production capacity of 4.98 million tons or close to 5 million tons.

"We have a big bauxite reserve at 3.2 million tons that can fulfill a capacity of 41.5 million tons. Of the 8 smelters prepared, there are still 12 other smelters with the durability of our bauxite is between 90–100 years," Hartarto added.

In addition, bauxite ore will be processed into alumina, then into aluminum or aluminum ingots, then processed into derivative products in the form of bars or flats, and will be distributed to industries that currently have the ecosystem, namely the machinery and construction industries.

ANTARA

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