Indonesia to export 11632 tonnes of alumina in 2016, up 10.2% YoY

At a time when Indonesia is considering a revision of its ore export policy, including deferment of the ban on processed ore exports by three to five years from January 2017, Customs data released by China last week showed that alumina imports from the South-east Asian country surged 191.1% month-on-month to 81,800 tonnes in September. In fact, Indonesia beat Australia to become China’s top alumina supplying country in the month under review. This indicates at the fact that the Indonesia government's strategy to build and develop a domestic processing industry through the of banning mineral ore export is paying off slowly. However, industry experts believe that the processed ore, alumina in this case, should move further down the value chain before getting shipped to the international markets, in order to further develop aluminium smelting here.

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Indonesia exported a total volume of 10546.02 tonnes of alumina worth US$5.2 million in the year 2015. In 2016, the country is estimated to ship 11632.04 tonnes of alumina to the international market, up 10.29% from the previous financial year. The total export value is estimated to reach US$8.3 million in 2016, increasing 59.61% from the previous fiscal.





Indonesia imposed a ban on raw mineral ore export including bauxite and nickel ore in early 2014. The objective was to stop mineral wealth drainage in the overseas market and to build a domestic processing industry. Before the moratorium, the country was the biggest supplier of bauxite to China. The initiative has resulted in moderate development. PT Well Harvest Winning Alumina Refinery in West Kalimantan province is progressing at a slow but steady pace. Well Harvest, a venture between the Jakarta-based Harita Group, China Hongqiao Group and others, has plans to export 500,000 tonnes of alumina this year, said Erry Sofyan, chairman of the Association of Indonesia Bauxite and Iron Ore Producers. The company will double capacity to one million tonne next year, he said.

PT Aneka Tambang also has a chemical-grade alumina plant in Tayan in West Kalimantan.

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However, there is no guarantee that by allowing exports of processed ore like alumina, the construction of alumina refineries will be smoother, Director General of Minerals & Coal Bambang Gatot Ariyono opined at a recent press meet. Building an alumina plant is way costlier than other mineral processing units, he said.

According to some industry experts, without the relaxation of the mineral export ban moderation, Indonesia's mining industry will not recover. Data shows, Indonesian mining industry value shrank by 19.8% in 2015. It is estimated to decline further by 8.4% in 2016. Without ban relaxation the mining sector's contribution to GDP will decline to 5% by 2020, down from 11% in 2013 before the ban, show indicators.