Indonesia’s President, Joko Widodo, announced that the county will place a ban on bauxite exports from June 2023, in the country’s latest move aimed at boosting the domestic processing of its mineral resources.

Indonesia is no stranger to export bans.  The country imposed a ban on unprocessed ore exports in 2014 to spur higher-value smelting industries.  The move was highly successful in securing investment in downstream nickel processing capacity. Nickel from laterite sources was originally shipped to Chinese producers of nickel pig iron (NPI) (a cheaper and lower-grade ferronickel), but the ore ban helped to reverse this trend and Indonesia is now the largest producer of NPI for its integrated stainless steel industry (it also exports to China). Indonesia also now produces nickel intermediates for use in the battery supply chain.  However, its unique geological position (it is the leading source of nickel laterite) very much helped the country to leverage its dominance to attract foreign investment in processing capacity.

Given that Indonesia does not hold the same resource advantage for bauxite, will the country’s latest move prove as successful to push further downstream to aluminium smelting or at least additional SGA capacity?  The 2014 ban saw bauxite output levels fall back sharply and in 2015, bauxite output solely served the country's domestic chemical alumina refinery. In 2016, the construction of a 1Mtpy smelter grade alumina (SGA) refinery was completed, an Indonesian and Chinese joint venture.

Bauxite is the ore mined to produce aluminium. Aluminium finds its use in energy transition applications mainly through "lightweighting" and it is already a key material in the automotive industry. The pivot to electric vehicles (EVs) will see a continued need for lightweighting.