A member of Commission VII of the House of Representatives (DPR) has asked the Ministry of Energy and Mineral Resources (ESDM) to grant export relaxation
for several minerals products that have not completed the construction of smelter especially for bauxites.
“In this case, our understanding is that the Energy and Mineral Resources Ministry has given policy space for copper, in this case Freeport and Amman Mineral Nusa Tenggara,” Maman Abdurahman said on Thursday, July 11, 2024.
President Joko Widodo officially banned the export of bauxite ore starting June 2023 as part of the efforts to encourage the downstream industry and add value to Indonesia’s economic resources.
Maman Adurahman told a discussion between the minister and members of the House that both parties open up opportunities for export relaxation to several mineral products that have not been able to build smelters.
When members of the House and the ministry discussed Article 170A of Coal and Mineral Law, both parties opened an opportunity to anticipate the absence of smelter investments.
“We still open the opportunity for several producers of mineral products that have not been able to build smelters. That’s why it is called certain metal minerals. This means that space is given to our colleague at the ministry to be able to classify, which minerals that can still be opened for export,” he said.
Article 170A of Coal and Mineral Law stipulates that contract of works and special mining business permit holders of metal mineral production operations which have carried out processing and refining activities, or are in the process of building processing and or refining facilities, or have collaborated in processing and or refining with holders of operation-production special mining business permit (IUP-OP), other IUPK-OP or IUP-OP specifically for processing and refining or other parties carrying out processing and or refining activities can sell certain metal mineral products.
Bauxite, Maman said, as a mineral has a characteristic that is different in comparison with other minerals based on their chemical compositions. Considering their difference in chemical composition, those minerals should be treated differently. For example, the raw material of copper has 90 percent added value, while the raw materials of bauxites has 50-60 percent of added value.
“Therefore, I used to think that it is very visible if the smelter development policy must be encouraged in bauxite. However, with the high investment value of smelter construction in bauxite, this finally impacts the ability of IUP owners to build smelters. In reality, today there are only three existing bauxite smelters in Indonesia,” he said.
The three bauxites smelters are PT Bintan Alumina Indonesia in Riau Island province , Well Harvest Winning in West Kalimantan and Borneo Alumina Indonesia also in
West Kalimantan.
“Currently, the smelter of Borneo Alumina Indonesia, which is a state-owned company, is in commissioning process.” he cited.
Impact on region’s economy
Maman Abudrahman said that as a representative of the people of West Kalimantan electoral zone, he hoped the government did a more objective study on the impact of bauxite export ban to the province. Government in his opinion needs to open more opportunity for exports of bauxites for a limited quotas in order to encourage the growth of West Kalimantan economy.
“We will invite several regents, governor of West Kalimantan and businessmen in West Kalimantan and local people so their aspirations can be considered, ” he said.
Maman, however, said that he does not mean that the government should allow the export of bauxites ores, but to grant limited export quota in order to dynamize West Kalimantan economy.
