MEMR imposes fines of up to $10m on bauxite miners over smelter delays

The Ministry of Energy and Mineral Resources (MEMR) has imposed fines on several bauxite mining companies for failing to build mandatory smelters or bauxite refining facilities.

Director General of Minerals and Coal Tri Winarno did not disclose the names of the sanctioned companies, but said penalties reached as high as US$10 million in some cases.

“Because the companies did not build smelters, we imposed fines. Some fines reached US$10 million. Several companies have been sanctioned,” Tri said during a hearing with Commission XII of the House of Representatives on Tuesday.

According to presentation materials shown during the hearing, six bauxite smelters are being developed to produce smelter-grade alumina (SGA) and chemical-grade alumina (CGA). The facilities are expected to have a combined bauxite ore processing capacity of 19.68 million tons and refined output capacity of 7.48 million tons.

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MEMR data show Indonesia has estimated bauxite resources of around 7.4 billion tons, including approximately 2.7 billion tons of mineable reserves, highlighting the country’s large resource base for downstream mineral processing and industrialization.

However, utilization of the reserves remains below potential following the government’s ban on raw mineral exports.

Indonesia’s bauxite ore production reached 31.8 million tons in 2022 before declining to around 19 million tons in 2023 after the export ban took effect. Production fell further to 16.8 million tons in 2024, according to ministry data.

Editing by Reiner Simanjuntak