Friday, April 19, 2024

ESDM ministry to set bauxite price index, enhance transparency and efficiency

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The Ministry of Energy and Mineral Resources (ESDM) is establishing a bauxite price index in cooperation with related stakeholders. 

Acting Director General of Minerals and Coal at the Ministry of ESDM, Bambang Suswantono, revealed that coordination has been initiated with relevant associations.

“At present, we are actively discussing this issue with the bauxite association to provide the best solution,” Bambang said on Tuesday, March 19, 2024.

Tri Winarno, Director of Mineral Business Development at the Ministry of ESDM, concurred while suggesting that the ministry is finalizing the mechanism for the bauxite price index. 

According to the United States Geological Survey (USGS), global bauxite production volume reached 380 million metric tons in 2022. 

Australia was the largest bauxite-producing country in 2022, with a production volume of approximately 100 million metric tons.

Meanwhile, Indonesia ranked fifth globally, with a bauxite production volume of around 21 million metric tons. Other countries on the list of major bauxite producers include China, Guinea, Brazil, India, Russia, Saudi Arabia, Kazakhstan, Jamaica, and Vietnam.

However, this data does not include bauxite production from the United States (US). The United States Geological Survey (USGS) states that US production figures are still confidential for the benefit of related companies.

Bauxite is a raw material for producing aluminum, a lightweight metal that can be hardened like steel, corrosion-resistant, and a good electrical conductor. 

Aluminum then becomes an important raw material for various industries, from automotive and household appliances to solar panel technology. Currently, the government is encouraging the value-added improvement of bauxite commodities by constructing several smelters. 

The Ministry of ESDM targets the construction of seven bauxite smelters this year with a total investment of US$ 5.85 billion (IDR 91.6 trillion).

Of the seven smelter projects, six are still in the process of seeking investors due to funding constraints, while one project is hindered by mining license (IUP) recovery.

Arifin Tasrif, ESDM Minister, mentioned that there are currently four bauxite smelters in Indonesia with a total processing capacity of 13.9 million tons. These facilities produce 4.3 million tons of alumina. 

The four smelters are managed by PT Indonesia Chemical Alumina, PT Bintan Alumina Indonesia, PT Well Harvest Winning Alumina Refinery Line-1, and PT Well Harvest Winning Alumina Refinery Line-2.

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