Stimulus Essential for Advancing Domestic Bauxite Industry's Downstreaming Efforts
17 Jan 2025, 11:21 AM
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The development of the bauxite mining business in the country, according to the Indonesian Bauxite Association (ABI), has not progressed as expected.According to the Chairman of ABI, Ronald Sulistyanto, his organization remains somewhat pessimistic about the development of the bauxite sector, especially in terms of its downstream process. However, he mentioned that it is not impossible for mining companies to expand into bauxite mining."It means that those who don't own bauxite mines are transitioning into bauxite mining, which is a good sign. But if we look at it, even those who already own bauxite mines, back in the 2017 Integrity Pact, there were 11 companies that had not progressed yet. In fact, due to delays, they were fined by the government" said Ronald, when contacted by Kontan, Thursday (January 16).For your information, the Integrity Pact is an agreement made to affirm the commitment to develop bauxite refining or smelting facilities within the country."Now, if there are new plans (for bauxite smelters), just imagine that the 11 companies from the 2017 Integrity Pact haven't materialized yet, let alone the new ones. I’m quite pessimistic about it. Especially if it’s just a plan for acquiring bauxite mines" he added.Ronald further mentioned that even if there is growth in the bauxite sector, it will start with the mines. The potential for further development into smelting still has a 'future' outlook."That could be the case, meaning the focus will be on acquiring the mines first, and the smelters later. But if we hope for the best, it shouldn’t stop at just the mines; it should also include the smelters" he said. Bauxite Mining and Smelting Developments in IndonesiaIn Indonesia, there are three mining companies with bauxite mines, including PT Aneka Tambang Tbk (ANTAM) through its Tayan bauxite mine in West Kalimantan, which is managed by the West Kalimantan Bauxite Mining Business Unit (UBP Bauksit Kalimantan Barat).There are also PT Cita Mineral Investindo Tbk (CITA), part of the Harita Group, which owns a bauxite mine in Ketapang Regency, West Kalimantan. The mine is managed by two of its subsidiaries, PT Harita Prima Abadi Mineral and PT Karya Utama Tambangjaya.PT Indika Energy Tbk (INDY) also owns a bauxite mine, which is managed by its subsidiary, PT Mekko Metal Mining (Mekko), located in Ngabang, Landak, West Kalimantan.Regarding the decision to enter the bauxite mining sector, PT Bumi Resources Tbk (BUMI) has not disclosed any clear plans.However, BUMI's Director and Corporate Secretary, Dileep Srivastava, stated that the company does not rule out the possibility of expanding into other mineral sectors."Bumi has long expressed its intention to continue focusing on coal but without expanding its capacity, and to pursue projects outside of coal, such as coal-to-chemicals and non-coal projects in the metals and minerals sector" he explained when contacted by Kontan on Thursday (January 16).In terms of smelter ownership, the state-owned mining company, PT Indonesia Asahan Aluminium (Inalum), recently revealed that the first phase of the Smelter Grade Alumina Refinery (SGAR), a collaboration with Antam in Mempawah, West Kalimantan, will be fully operational by early 2025.This smelter is expected to produce 1 million tons of alumina, requiring 3.3 million tons of bauxite annually as raw material.Meanwhile, other bauxite smelters in Indonesia are owned by several companies, including PT Indonesia Chemical Alumina (ICA), PT Well Harvest Winning Alumina Refinery, and PT Bintan Alumina Indonesia.In 2024, Ronald mentioned that the smelter owned by PT Borneo Alumina Indonesia should already be operational, which would increase the number of domestic bauxite smelters."We consider the addition in 2024, for example, Borneo Alumina, which has not started production until now" he said.Overall, the development of bauxite downstream processing in 2025 is predicted to still not meet expectations."I don't find the progress encouraging" he concluded.
