General chairperson of the Indonesian Chamber of Commerce and Industry (Kadin), Arsjad Rasjid, on Tuesday voiced support for the bauxite export ban, saying it will increase the added value of the nation’s natural resources.

The ban on bauxite exports will come into effect from June 2023. The policy is in accordance with the mandate of Law Number 3 of 2020 on Mineral and Coal, Rasjid said.

"If we only export raw materials, well, we are actually at a disadvantage. It is our right as a nation to have added value. So this measure was pursued as a result of an evaluation by the government of the previous scheme, and also to encourage domestic industrialization," he said in a statement received here on Tuesday.

However, the export ban policy would be even better if backed by a clear downstreaming road map, instead of just going on a spree of building as many smelters as possible with no aim nor purpose, he added.

Currently, factories for bauxite ore processing and refining are located in Central and Southeast Sulawesi, East Halmahera and South Halmahera, Galang Batang Bintan Island, and West Kalimantan.

According to Rasjid, the downstreaming effort undertaken by the government is aimed at encouraging an increase in the processing of other domestic natural resources.

"This is not only limited to nickel and bauxite, but also includes tin, copper, and especially gold as well. We must utilize our natural resource wealth to process it as best as possible and generate added value, which will be beneficial to the welfare of the Indonesian people," he said.

It is also expected that bauxite downstreaming would be similar to that for nickel—integrated from upstream to downstream—so that it actually produces high added value and not just semi-finished goods, he added.

He said he is confident that downstreaming will help promote the processing of bauxite into aluminum ingots by 2025. This would have an impact on the national economy through downstream bauxite, light industry and modern, environmentally friendly logistics.

"Aluminum ingots are required by the domestic industry, like plates, billets, scrap, and profile shapes necessary in industrial processes such as airplanes, ships, automotive, and construction," he pointed out.

In the next few years, it is expected that these needs would be entirely met by the domestic aluminum industry. Indonesia can meet its aluminum needs for some decades to come with its current bauxite reserves. 

Image source: ANTARA/HO-KADIN

Source: https://en.antaranews.com/news/267504/bauxite-export-ban-will-generate-added-value-chamber