Bauxite export ban set to be lifted

The government indicated it would lift the ban on bauxite export to help miners raise fresh funds to finance the construction of their aluminum smelters, many of which have been stalled due to financial problems.

The team for the acceleration of smelter development at the Ministry of Energy and Mineral Resources has made the proposed removal of the ban because some aluminum smelter projects had been delayed as miners did not have enough funds to continue construction, said team chairman Said Didu.

By reopening the bauxite export, a number of aluminum smelters currently under construction could continue, he said. He, however, said that if they were allowed to export, they would be required to pay export taxes and provide surety bonds to ensure that all export proceeds would be used for the construction of the smelters.

The government in January of last year imposed an export ban on mineral ores in a bid to push miners to build domestic smelters to generate greater value added from mineral commodities as mandated by the 2009 Mining Law. Exemptions, however, are given to mineral concentrates, which are still allowed for overseas shipment until 2017.

A dissenting opinion regarding the proposal to remove the ban on bauxite exports came from the Energy and Mineral Resources Ministry?s director general for mineral and coal, R. Sukhyar. ?The government has not stated anything on the matter. This is false and disruptive,? Sukhyar said separately on Monday as quoted by The Jakarta Post.

The Post said the country produced over 58 million tons of bauxite in 2013, according to figures from the ministry?s mineral and coal directorate general. The figure dropped sharply to 2.8 million tons last year following the ban.

Currently, the only smelter that processes bauxite is operated by PT Indonesia Chemical Alumina (ICA), a subsidiary of state-owned PT Aneka Tambang. The ICA plant, which processes bauxite into alumina with an input capacity of 300,000 tons, has commenced commercial operations.

Four other smelters are in development, consisting of a smelter in West Kalimantan by PT Well Harvest and Harita Group, in West Kalimantan by PT Indo Kapuas Alumina, a facility in Riau by Bintan Alumina Indonesia and another smelter in West Kalimantan by Nusapati Alumina Refinery. (*)