Bauxite dealers urge Indonesia to reconsider the ban on raw ore export at the last moment

According to mining.com, on June 6, it was reported that just a few days before Indonesia was about to implement a ban on the export of Bauxite raw ores, the miners once again asked the government to reconsider this policy, because Indonesia's domestic facilities were not enough to process all their Bauxite.

Indonesia is the sixth largest Bauxite producer in the world. According to a law prohibiting the export of all raw ores issued in 2020, Indonesia will stop exporting aluminum raw materials from Saturday. This law aims to promote investment in smelters.

The Government of Indonesia last month relaxed the one-year deadline for copper, iron and other ore miners to have more time to complete the construction of smelters, but retained the ban on Bauxite exports.

Official data shows that Indonesia has three smelter level alumina plants and one chemical level alumina plant, with a total input capacity of nearly 14 million tons. Arifin Tasrif, Indonesia's mining minister, said last month that this was enough to absorb Bauxite production.

However, Ronald Sulistyanto, president of the Association of Bauxite and Iron Ore Companies in Indonesia, told Reuters on Monday that the output of Bauxite has reached about 30 million tons per year. If there is no market for surplus iron ore, it may force miners to stop production.

Indonesia's Bauxite export ban aims to replicate the successful experience of nickel processing industry in attracting foreign investors. Indonesia banned the export of raw ore overseas in 2020.

However, Sulistyanto, representing 28 miners' organizations, said that the starting price of Bauxite processing equipment is about 1.2 billion dollars, and the cost may be three times that of nickel pig iron smelters. Since Indonesia first announced a ban on raw ore exports in 2009, miners have struggled to obtain bank financing.

Sulistyanto said, "Our members hope that if the government wants the Mining Industry to move forward, it should be re evaluated." The Indonesian Ministry of Energy and Mineral Resources did not respond to the organization's request.

Sulistyanto added that "miners hope to build alumina smelters, but what they need is support, not punishment." He called on relevant departments to provide guarantees for bank loans for alumina smelters.

However, Irwandy Arif, a special staff member of the Minister of Mines, told Reuters that mining companies have enough time to respond to the ban and it will be implemented as planned.

Irwandy Arif told Reuters that if some miners' smelters are halfway built, the government may consider exempting them from the ban, but out of the 8 ongoing alumina projects, 7 have not made substantial progress.

Irwandy Arif said that the Government of Indonesia had tried to facilitate the meeting between mining companies and banks, but could not provide guarantees. He said, "One of the standards is the progress of smelter construction, while the progress of alumina smelters is minimal, which makes it difficult for the government to consider exemptions

Fitch Solutions said that the ban is unlikely to have a significant impact on the global market, because China, as the world's largest aluminum producer, can purchase Bauxite from Guinea and Australia, and both countries can increase production.

Industry experts said that unlike nickel mines, Indonesia's ban on Bauxite is unlikely to attract foreign investment due to the existence of alternative Bauxite producing countries.