by Nurul Fitri Ramadhani

JAKARTA, June 21 (Xinhua) -- Indonesia will keep pushing ahead with its newest policy banning bauxite ore export although it sparks national controversy and may face international lawsuits, Indonesian President Joko Widodo said Wednesday.

Indonesia, the world's sixth largest bauxite producer, has banned the export of bauxite raw ore since June 10. Bauxite is an important commodity used in various industrial products, including aluminum and cement.

Widodo said Wednesday in an event in Bogor, West Java province that he was fully aware that the ban would spark disappointment from many other countries, but Indonesia had to start aggressively moving ahead to develop its downstream industry.

The bauxite ore export ban is part of Indonesia's goal to process its raw mineral materials at home, push its mineral downstream industry and invite investments for building smelters and manufacturing factories so that the country can get added value for their mineral productions.

Since January 2020, Indonesia has banned exports of unprocessed nickel ore, the main component for making steel and electric-vehicle batteries. The policy has successfully driven foreign buyers of Indonesian nickel to invest in establishing nickel-producing factories for higher value-added industrial activities in Indonesia, the country with the world's largest nickel reserves.

The nickel export ban was sued by the European Union (EU) to the WTO as the ban could harm the EU's stainless-steel industry.

"When we stopped nickel ore exports, the EU sued us, and we lost. And then we filed an appeal. That's why stopping raw mineral exports requires courage from our government," Widodo said.

The bauxite export ban, instead, has sparked controversy among bauxite miners across the country, mainly because many claimed that the policy was enacted when Indonesia has not yet had enough smelters to accommodate the mounting production capacity of bauxite, which then forced many companies to reduce their production for a while.

Data from Indonesia's Ministry of Energy and Mineral Resources shows that of 12 bauxite smelters the country targets to have, only four smelters have been established and are operating.

Executive Chairman of the Indonesian Bauxite and Iron Ore Companies Association Ronald Sulistyanto said that a number of bauxite miners needed to reduce, or even stop, their production because the four smelters could only accommodate 13.9 million tons of bauxite ore per year, while the total nationwide production had reached 30 million tons per year.

"This export ban, thus, will pose negative impacts to hundreds of thousands of mining workers," Sulistyanto said last Saturday.

Indonesian Minister of Energy and Mineral Resources Arifin Tasrif said earlier that the export ban might indeed cause no less than 1,019 workers in the bauxite mining sector to lose their jobs because the ban was estimated to decrease export volume up to 8.09 million tons, or 288.52 million U.S. dollars in value, in 2023.

However, Tasrif ensured that the export ban would give the bauxite ore an added value of 1.9 billion dollars from the current operational refining facilities.

An economic expert from Gadjah Mada University in Yogyakarta, Fahmy Radhi, said he believed that this policy, just like the nickel ore ban, would attract investors to invest in the construction of the required bauxite smelters. Enditem

Related

Go to Forum >>0 Comment(s)