Indonesia Will Ban Bauxite Ore Exports in June 2023

Liputan6.com, Jakarta - Indonesian President Joko Widodo (Jokowi) announced that the government would establish a ban on the exports of bauxite ore, starting in June 2023.

"The government will promote the processing and refining industries of domestic bauxite," Jokowi said in a press conference at the Merdeka Palace, Jakarta, Wednesday (21/12/2022).

He said that the government strives to improve the natural resource industries in the country. Jokowi also estimated that state revenue will increase sharply, following the ban on bauxite exports.

"From the industrialization of bauxite in this country, we estimate that state revenue will increase from Rp 21 trillion to around Rp 62 trillion," he explained.

Jokowi announced this decision after his government made a similar policy for nickel exports. However, the case landed in the World Trade Organization (WTO) after the European Union successfully showed the policy violated WTO rule. Indonesia is currently appealing WTO's verdict.

The president emphasized that exports of raw materials will be reduced continuously. He cited that the government's decision to apply nickel export ban policy in 2020 brought positive impact on Indonesia.

"As a result, the initial export value of nickel was only Rp 17 trillion or US$ 1.1 billion at the end of 2014. It has increased to Rp 326 trillion or US$ 20.9 billion in 2021. Or an increase of 19 times," Jokowi remarked.

"My estimate this year will be more than Rp 468 trillion or more than US$ 30 billion," said Jokowi.

Minister for State-Owned Enterprises Erick Thohir said the government's commitment to stop exports of nickel to bauxite is not meant as anti-foreign.

Erick Thohir said the decisive step is to support the downstream industries of nickel and bauxite in order to increase added value while at the same time encouraging employment.

"We are not anti-foreign investment, but an even balance of growth must be ensured. Indonesia's growth must be higher than other countries through downstreaming the nickel and other industries," said Erick in the Indonesian Cyber Media Association (AMSI) seminar last August.

Erick also said that Indonesia's natural resources and big market have only been used for economic growth and job creation that only benefit other countries. But Indonesia has a great opportunity to become an electric battery-producing country through nickel downstream.

"My question is always the same, when will the change occur if we don't adapt, thus it only makes us a market," he said.

For this reason, continued Erick, the government strives to work hard to make changes by suppressing the shipment of natural resources in the form of raw materials abroad. The plan includes to strength the electric battery industry ecosystem to increase job opportunities and economic growth.

Writer: Safinatun Nikmah.

Lizsa Egeham contributed to the article.