Tuesday, April 16, 2024

Millions tons of bauxite to remain unsold, $7.7 billion in exports at stake

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Audina Nur

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The Ministry of Energy and Mineral Resources (ESDM) projects that there will be 13.86 million tons of unsold bauxite domestically from this year’s upstream mining production capacity. This amount equates to export value of US$494.6 million or Rp7.7 trillion.

This projection illustrates the idle capacity experienced by about 80 companies holding domestic bauxite mining business permits (IUPs). The mineral authority calculates the risk of unsold bauxite to be approximately US$494.6 million. Recently, only 15 to 16 IUP-holding companies have been operating with a total production capacity of 13.88 million tons.

“Out of the 80 bauxite IUPs, there were only about 15-16 IUPs in 2023 that were operational because these IUPs are affiliated with the operational Alumina Smelters,” Director of Mineral and Coal Program Development at ESDM, Julian Ambassadur Shiddiq, said on Tuesday, February 13, 2024.

After the moratorium on bauxite exports as of June 10, 2023, the government identified the input capacity of four commercially operational smelters in the country at 13.88 million tons, with smelter grade alumina (SGA) production capacity reaching 4.3 million tons.

“The future bauxite production plan may match the input capacity of the currently operational smelters since there is no relaxation policy for bauxite ore export, which is 14 million tons,” Julian stated.

However, the planned production of 14 million tons could increase with the addition of input capacity from refinery plants in the middle of this year. “This [production] figure could increase if there are additional operational alumina smelters,” he added.

In addition to the joint efforts of Inalum and Antam, there are 7 IUPs currently establishing smelters, including PT Quality Sukses Sejahtera, PT Dinamika Sejahtera Mandiri, PT Parenggean Makmur Sejahtera, PT Persada Pratama Cemerlang, PT Sumber Bumi Marau, PT Kalbar Bumi Perkasa, and PT Laman Mining. These eight new smelter plans have a bauxite input capacity of 27.41 tons and an alumina production capacity of 9.98 million tons. However, Indonesia currently only has one aluminum plant owned by PT Indonesia Asahan Aluminium or Inalum in Kuala Tanjung, with an alumina input capacity of around 500,000 tons annually.

As reported earlier, the Indonesian Association of Bauxite and Iron Ore Entrepreneurs (APB3I) regrets the delayed approval of the Work Plan and Budget (RKAB) for the 2024-2026 period for bauxite mining companies until early this year. Acting Chairman of APB3I, Ronald Sulistyanto, said that the slow approval from the mineral authority has caused dozens of mining companies to cease production.

Ronald mentioned that domestic alumina factories are already requesting raw materials from bauxite miners. “Until today, the approval hasn’t been issued as yet. Currently, only around 10 or 12 bauxite miners have submitted their RKAB, which is very few. Without the RKAB, we cannot operate,” Ronald said on Tuesday, February 13, 2024.

Audina Nur

Journalist

 

Editor

 

Interview

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