Indonesia considers expediting bauxite export ban after implementing nickel export ban from Jan 2020

Indonesia has announced that it would ban exports of nickel from the country from 1 January 2020 next year, two years ahead of the slated timeline. Local media report also says that Indonesia is also considering expediting its ban on bauxite exports.

Luhut Pandjaitan, coordinating minister of Indonesia, reportedly said that the country is also weighing on the option of expediting the implementation of the ban on exports of bauxite. Currently the deadline for implementing bauxite ban is slated for 2022.

Indonesian officials said they want to speed up construction of smelters to produce value-added downstream products, rather than just exporting raw-materials abroad – including to top importer China that imports considerable volume of bauxite and nickel.

Currently, export of bauxite is allowed to companies that have a specific license (i.e., the bauxite production operation business license). Also, the companies are allowed to export bauxite with certain alumina value content (≥ 42%) and in specific amounts. The company needs to prove that it already has or has been establishing a refining smelter.

Shanghai aluminium prices had jumped nearly 2% to a one-year high of RMB 14,675 per tonne in afternoon trade yesterday after the news about possible bauxite ban floated in the market. The most-traded aluminium contract on the Shanghai Futures Exchange for November delivery later gave up the gains and ended the trading day slightly higher at RMB 14,385 per tonne.