Ban on bauxite ore exports which will come into force in June 2023 is expected to encourage the domestic bauxite processing and refining industry, and it is estimated that state revenue would increase from 21 trillion rupiahs to around 62 trillion rupiahs.

Jakarta (Indonesia Window) – The Indonesian government has decided to ban the bauxite ore exports and at the same time encourage the domestic processing and refining of this mineral product.

The policy to ban the bauxite ore exports, which will come into force in June 2023, was announced by Indonesian President Joko Widodo (Jokowi) in a press statement at the Merdeka Palace in Jakarta on Wednesday.

"I repeat, starting in June 2023 the government will impose a ban on bauxite ore exports and encourage the domestic bauxite processing and refining industry," President Joko Widodo asserted.

According to the head of state, from the industrialization of bauxite in the country, it is estimated that state revenue would increase from 21 trillion rupiahs (some 1.3 billion U.S. dollars) to around 62 trillion rupiahs (some 3.9 billion U.S. dollars).

The Indonesian government continues to strive to improve the domestic natural resource processing industry, the president said, adding that the government will also continue to reduce exports of raw materials while increasing the downstreaming of natural resource-based industries in the country.

"The government continues to be committed to realizing natural resource sovereignty and increasing the added value in the country, especially in the context of opening as many jobs as possible and raising foreign exchange earnings and increasing more equitable economic growth," he said.

Previously, since January 1, 2020, the Indonesian government had implemented a policy to ban nickel ore exports.

The president pointed out that the policy succeeded in significantly increasing the value of nickel exports from 17 trillion rupiahs at the end of 2014 to 326 trillion rupiahs (some 20.9 billion U.S. dollars) in 2021, or an increase of 19 times.

"My estimate is that this year it would reach more than 468 trillion rupiahs or more than 30 billion U.S. dollars. This is just one commodity. The government will continue to consistently carry out domestic downstreaming so that added value is enjoyed domestically, for the progress and welfare of the people," he said.

Reporting by Indonesia Window