Energy Ministry yet to review aluminium smelter moratorium proposal

The Ministry of Energy and Mineral Resources has responded to calls for a moratorium on alumina and aluminium smelter construction, saying it has yet to conduct a formal review of the proposal.

Tri Winarno, Director General of Minerals and Coal at the ministry, said the government currently distinguishes between two types of smelter development: stand-alone facilities and projects integrated with bauxite mines.

 “We have not discussed that yet. So far, there are two types of smelters — stand-alone projects and integrated projects. Stand-alone facilities fall under the authority of the Ministry of Industry,” Tri said on Wednesday.

The comments follow concerns raised by state-owned PT Indonesia Asahan Aluminium (Inalum) over Indonesia’s long-term bauxite supply, with the company suggesting a moratorium should be considered as domestic refining capacity expands.

Inalum President Director Melati Sarnita said the issue was discussed during a recent working visit to Pontianak, West Kalimantan, after a presentation by the energy ministry on Indonesia’s bauxite resources and reserves as of 2024.

According to data cited by Inalum, Indonesia’s proven bauxite reserves stand at around 1 billion tonnes, with total reserves estimated at 2.8 billion tonnes.

The company noted that about 13 firms are planning to build alumina refineries in Indonesia over the next decade, based on internal assessments and market data.

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Installed alumina refining capacity in 2026 is estimated at around 9 million tonnes per year, but could rise to nearly 29.8 million tonnes annually if all planned projects proceed.

Under those projections, Inalum estimates bauxite demand for existing refineries would reach 29–36 million tonnes per year, while full operation of all planned projects could push demand to 80–94 million tonnes annually.

Melati warned that such growth would significantly strain domestic reserves, potentially reducing the lifespan of proven reserves to less than 10 years and total reserves to about 28 years at projected consumption rates.

 “This is a major concern for us because one of our investments, the Mempawah aluminium smelter, has an economic life of 30 years,” she said.

The debate highlights growing concern within Indonesia’s metals sector over balancing downstream expansion with the sustainability of raw material supply, as the country seeks to strengthen its position in the global aluminium value chain.

Editing by Reiner Simanjuntak