On April 2, 2025, Indonesia’s Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia responded to concerns that state-owned mining firm PT Aneka Tambang (Antam) cannot sell its bauxite due to ongoing export restrictions. Bahlil said he would review the situation but reaffirmed that the government is committed to its domestic processing mandate, enforced through Domestic Benchmark Pricing (HPM). The measure, implemented to add value within Indonesia, has led to concerns over its market impact.
Image source: antam.com
The export ban on bauxite remains in effect, with all sales now required to go through the HPM system. Several lawmakers argue that this pricing mechanism has disrupted market absorption, as buyers are unwilling to purchase bauxite at the government-set prices. The benchmark pricing was introduced through ESDM Decree No. 72.K/MB.01/MEM.B/2025, which came into force on March 1, 2025.
Under the regulation, holders of mining business licenses (IUP/IUPK), contracts of work (KK), and coal contracts (PKP2B) must sell minerals and coal at or above HPM or HPB (benchmark coal price). The pricing formula is derived from HBA (coal reference price) and aims to ensure fair domestic value. However, Antam has reported a complete halt in the sale of its washed bauxite and ferronickel products since April 1.
During an April 30 hearing with Commission XII of the House of Representatives (DPR), Antam’s President Director, Nico Kanter, stated that buyers and smelters are unwilling to pay HPM. “Since April 1, we have stopped selling because when we tried offering to buyers, there were no buyers or smelters willing to pay the HPM. It makes them unprofitable,” he said in a broadcast of the hearing.
Kanter added that HPM is too high and disrupts previous business-to-business (B2B) pricing flexibility. He added that domestic alumina smelters, which rely on bauxite, are also suspending purchases, raising concerns about long-term operations. Furthermore, halted sales mean Antam cannot pay royalties to the state, impacting public revenue. He also confirmed that ferronickel sales have ceased for the same reason.
Responses
