JAKARTA: Indonesian president Joko “Jokowi” Widodo today announced a ban on exports of another mineral, this time bauxite, as he remains steadfast in his drive to develop a domestic mineral refining and processing industry.
“The government is committed to continually building sovereignty in our natural resources sector and add value to domestic (products) in order to open as many jobs as possible, increase foreign exchange (revenue) and create an even economic growth,” the president said while announcing the policy at the presidential palace in Jakarta.
He said the ban on exports of bauxite, the world’s primary source of aluminum, will take effect in June.
Jokowi expects the move to increase the value of the country’s bauxite-based exports from around 21 trillion rupiah to at least 62 trillion rupiah.
Aluminum is widely used in kitchen utensils, window frames, building materials, aircraft and a huge variety of other products.
The government banned nickel exports in January 2020, eliciting a World Trade Organization (WTO) dispute.
Indonesia is the world’s largest producer of nickel, an essential component in stainless steel and electric vehicle batteries.
Indonesia this year has also temporarily banned shipments of coal and palm oil, creating commotion in those markets.
The bauxite announcement came despite Indonesia’s recent WTO defeat.
The trade body on Nov 30 ruled that Indonesia’s nickel restriction, which the European Union said was hurting its stainless steel industry, was “not justified”.
Jokowi has said his government will appeal the ruling.
Today he made it clear Indonesia will keep pursuing its policy to restrict exports, saying the government will announce another export ban affecting one or two other commodities.
Previous statements by government officials, including Jokowi, suggest exports of tin or copper might be banned.
“For other commodities, we’re calculating them all – the industries’ readiness. As soon as they’re half ready … we will immediately cease (exports),” the president said.
“Even though we’re being sued, no problem,” he went on.
“The nickel (ban) has (gotten us) sued, and what we’re announcing might (get us) sued, too, but that’s fine. Our duty is to look for added value as much as possible.”
Jokowi said the nickel ban has successfully boosted the value of Indonesia’s nickel-related exports, to US$20.9 billion last year from US$1.1 billion in 2014, when Indonesia shipped only nickel ore.
Jokowi said the figure is predicted to reach over US$30 billion this year.
Indonesia holds one of the world’s largest reserves of bauxite.
Airlangga Hartarto, the coordinating minister for economic affairs, said that for many years most of the bauxite mined in Indonesia has been shipped to other countries such as China and Australia, and that Indonesia then buys refined products from these economies.
Hartarto said four refineries in Indonesia now use bauxite as feedstock with a combined production capacity of 4.3 million tons of alumina, an intermediate product.
Preparations are ongoing to build several other facilities that will more than double that capacity.
Hartarto added that Indonesia’s bauxite reserves are estimated to be enough to support 90 to 100 years of production.