Smelter Projects in Limbo Ahead of Bauxite Export Ban

Energy and Mineral Resources (ESDM) Minister Arifin Tasrif revealed that bauxite smelter projects in Indonesia have stagnated. They may even fall apart even though the government will ban bauxite exports starting June 2023. "Based on yesterday's visit, many smelters were in shambles, far from what was reported," Arifin said on Friday. The constructions progress of seven bauxite smelter is still stalled at below 50 percent complete, even though they are expected to operate in 2023. "We are evaluating the construction," he said, while adding that the government would not provide any relaxation. The ban on bauxite exports is imperative to increase the added value of the mining commodity while at the same time creating new jobs. "We have relaxed too much," he said.

Nevertheless, the ESDM Ministry will lobby national banks to support the acceleration of bauxite downstreaming. Many bauxite business players complain that they struggle to obtain funding from banks for smelter projects. Director of Mineral and Coal Program Development at the SOEs Ministry Tri Winarso assured that his side would try its best in supporting bauxite smelter projects. "We just planned to discuss it intensely, but we also have to discuss it with relevant banks," Tri said on Monday.