Indonesia's alumina exports hit by regulatory gap over rare earth content

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Indonesia is working to resolve a regulatory issue that has delayed exports of alumina and nickel products after authorities raised concerns over the presence of rare earth elements in some shipments.

The country’s Presidential Chief of Staff, Dudung Abdurachman, has called for closer coordination among government agencies, law enforcement bodies, and industry to address the lack of regulations specifying the maximum allowable rare earth content in exports of other minerals. Officials acknowledged that the absence of clear rules has disrupted mineral shipments.

Industry sources said alumina exports have been directly affected. One source in the aluminium industry said, "The government claims our alumina contains rare earth materials."  Indonesia is a major exporter of alumina, a key raw material used in aluminium smelting.

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Although alumina is produced primarily from bauxite for aluminium smelting, certain bauxite deposits contain trace amounts of rare earth elements. These elements are not intentionally produced during alumina refining but can remain associated with the material, creating regulatory challenges in countries where rare earths are classified as strategic resources.

The regulatory uncertainty has also affected parts of the nickel industry. Sources said exports of nickel pig iron, used in stainless steel production, and mixed hydroxide precipitate, an important battery material, have also faced delays, although the volume of affected shipments was not disclosed.

Dudung said exports should not be blocked in the absence of regulations governing rare earth by-products. The issue was discussed during a coordination meeting attended by representatives from economic ministries, the National Research and Innovation Agency (BRIN), the police, the Attorney General's Office, sovereign wealth fund Danantara, state-owned mining companies and industry associations.

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Indonesia's existing policy gives priority to the domestic use of rare earth elements, with President Prabowo Subianto establishing a dedicated agency to support the development of the country's rare earth industry.

According to Trade Data Monitor, Malaysia, India, Qatar, Singapore and China were the main destinations for Indonesian alumina exports during the first five months of 2026. China also accounted for nearly 98 per cent of Indonesia's ferronickel exports, a category that includes nickel pig iron.