Indonesia may ease bauxite export ban to generate revenue for building smelters

An Indonesian mining ministry official on Monday said that export ban on bauxite may be eased to promote smelter building in the country.

The country had banned the export of minerals last year in a bid to develop the upstream industry within the country and only export processed, end products.

Mineral export contributed significant earnings to the country’s economy and the complete ban on exports has put an additional pressure on the economy. Producers have had to halt construction of upstream processing plants due to lack of funds.

The government is considering easing the export ban and allowing mineral producers to acquire some revenue to continue the construction of smelter facilities, said Didu, head of the national smelter development team at the Energy and Mineral Resources Ministry.

He also added, "If this issue is left unaddressed, the government may not be able to reach the target of setting up smelters and boosting the downstream sector."

However the rules would be changed only against the surety that all the proceeds from the export will be used for developing of smelters. "To accelerate bauxite smelter development, they should pay a guarantee bond to develop smelters to the government," said Didu.