Thursday, March 23, 2023

Government to ban bauxite ores export starting June 2023

Reading Time: 3 minutes
Gusty da Costa





President Joko “Jokowi” Widodo announced that Indonesia would start banning the export of bauxite ores starting June 2023 to encourage the development of bauxite processing and refining industry at home. His statement came days after Indonesia filed an expected appeal against a World Trade Organization (WTO) panel ruling that was in favor of the European Union (EU) in a dispute over the ban on nickel ore exports.

“I repeat that starting June 2023, the government will impose the ban on bauxites ores export and encourage the development of bauxites processing and refining industry at home,” Jokowi told a press conference at the State Palace on December 21, 2022.

Estimated increasing state revenue

The president has estimated that the state revenue would increase from IDR 21 trillion to a whopping IDR 62 trillion from domestic bauxite industrialization. “The government will be consistent in developing the downstream industry to increase the added values so the people can enjoy the progress and the prosperity,” Jokowi said.

The government has committed to realize the natural resource sovereignty and increase the added value domestically, mainly in order to open job opportunities as many as possible and to increase foreign exchange revenue and evenly distributed economic growth.

Therefore, the government continues its efforts to optimize natural resources processing industry at home. Raw minerals export will be reduced whereas the development of natural resources downstream industry will be augmented.

Read also: Jokowi insists to promote downstream nickel industries despite loss at WTO

On January 1, 2020, Indonesia began banning nickel ores export. Consequently, the nickel export value skyrocketed from IDR 17 trillion, or US$ 1.1  billion at the end of 2014, to IDR 326 trillion, or US$ 20.9 billion in 2021, or increase by 19 times.

“In my estimation, the export value this year could reach more than Rp 468 trillion or US $30 billion. It is just from one commodity,” Jokowi added.

Domestic industry readiness

Coordinating Minister for the Economy Airlangga Hartarto said there were 4 existing bauxite refining facilities in Indonesia with the alumina capacity of 4.3 million tons per year. There are also bauxite smelters, which are under construction, with the input capacity of 27.41 million tons and 4.98 million tons each, or almost 5 million tons in production capacity.

He explained that Indonesia had 3.2 billion tons of bauxite reserves that could meet the capacity of 41.5 millions tons per year. From the prepared 8 smelters, there could be 12 additional smelters. It will take between 90 and 100 years to exploit Indonesia’s bauxite reserves.

The bauxite will be processed into alumina which later on processed into aluminum ingot. From the aluminum ingot, it can produce derivative products such as aluminum bars or plates. The aluminum bars can be processed into machine and construction industry.

Hartarto said that he was still waiting for the presidential instruction on other mineral commodities including tins and copper.

Read also: China controls Indonesia’s nickel industry

Jokowi said that he would need to calculate the readiness of other mineral industry before banning the export. When the industry is half ready, he will stop the export of raw minerals like tins and coppers. “We have to force the industry to be completed, so based on the case of nickel, we have learned many things,” he said.

Possible WTO lawsuit

Hartarto refused to comment on another possible lawsuit against the ban on bauxite ore exports. “There is no need to discuss it,” he said. He added that the government was monitoring the development in the world level.

He said the bauxite ores ban would not disrupt the supply chain of other countries. There are still other countries, such as Australia, which can supply bauxites ores. Previously, Indonesia has exported bauxite ores to Australia and China.

“The export of washed bauxite worth between US$ 500 million and US$ 600 million. The number will be compensated with investment and foreign exchange saving for US$ 2 billion and estimated export for IDR 62 trillion,” Hartarto said.

Indonesia lost to the EU in a dispute lawsuit against nickel export ban. Energy Minister Arifin Tasrif said the WTO Panel deemed Indonesia as violating the WTO’s Article XI.1 GATT 1994 and could not be justified by article XI.2 (a) and XX (d) GATT 1994. The Panel also rejected Indonesia’s defense regarding the limited amount of national nickel reserves and good mining practices.

Read also: Government relies on abundant natural resources to face 2023 global economic crisis

Hartarto said Indonesia has filed an appeal for the nickel ban decision by the WTO. He said Indonesia would include the opinions and views on nickel export ban in the appeal documents. “We are in the process with the European Union, certainly we have our own position. The panel of appeal will discuss the position,” he said.

Jokowi reiterated that Indonesia would open opportunities with other countries, foreign and domestic companies, to jointly develop their mineral resources related industry, especially nickel, bauxite, copper and tin. Individuals and companies can cooperate with state-owned enterprises, private sectors, or they can establish their own industry.

“However, we want the tax revenue stays at home, the non tax state revenue stays at home. If we have joint dividend, it should stay at home. There are royalty and job opportunity at home. That’s what we want and we will continue [with that],” Jokowi said.

Gusty da Costa






We will provide you with an invoice for your reimbursable expenses.


New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.


$550 USD/Year


$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email

Add keywords to your market watch and receive notification:
Schedule a free consultation with us:

We’ll contact you for confirmation.


The majority of the company’s IDR 80 billion in Capex will be spent on projects in Nusantara. The remaining Capex will go toward building maintenance and the completion of the Waskita Beton project’s land acquisition. “In essence, we are picky about how we spend the Capex. It will only be used to help the company’s productivity” stated Asep Mudzakir, WSBP Director of Finance and Risk Management.
The Indonesian government is awaiting the submission of PT Freeport Indonesia’s request for an early extension of its special mining business permit. The current permit will expire in 2041. “We are currently waiting for Freeport to request an extension,” Minister of Energy and Mineral Resources Arifin Tasrif stated on March 17, 2023. Meanwhile, according to Ahmad Redi, a mining law expert, the extension of a special mining business permit can only be granted at least 5 years before the permit expires.
Air Product and Chemical Inc. has decided not to pursue two downstream coal development projects in Indonesia. The company decided to withdraw from its coal gasification into DME collaboration with PT Bukit Asam Tbk (PTBA) and PT Pertamina. It also decided not to continue their engagement in developing methanol gas production facility in cooperation with Bakrie Group companies, PT Kaltim Prima Coal and PT Arutmin Indonesia.
PepsiCo and FrieslandCampina have suspended imports from Astra Agro Lestari, Indonesia’s second-largest palm oil company, Astra Agro Lestari (AAL), following an investigation into environmental and human rights violations committed in Central and West Sulawesi, Indonesia. The US and Dutch multinationals are the latest in a long line of consumer brands to cut ties with the company.
Ministry of Foreign Affairs of The Foreign Policy Strategy Agency (BSKLN) signed an MoU on cooperation with Raja Ali Haji Maritime University (UMRAH) to optimize the study and development of foreign policy strategies in the South China Sea. In addition, both parties also plan to have a more practical approach and advantageous cooperation, such as utilizing the South China Sea to manage the blue economy, particularly for fisheries.
When President Joko “Jokowi” Widodo, Defense Minister Prabowo Subianto and Central Java Governor Ganjar Pranowo gathered during a rice harvest event in Kebumen, Central Java, on March 9, 2023, many speculated that the president endorse the two presidential hopefuls for the 2024 election. The public has the right to perceive that the 3 politicians’ friendly gesture is an indication that Prabowo might pair with Ganjar to run for the presidency, said Immanuel Ebenezer, chairman of Prabowo Mania 08 supporting group. Both candidates can form a duet as they have a big opportunity to win, he added.