Indonesia is to ban bauxite exports from the middle of next year, its latest move aimed at boosting domestic processing of its mineral resources.
Bauxite is an ore used to make aluminum. Indonesia is the world’s sixth-largest producer and holds the fifth-biggest reserves, a US Geological Survey report said. Exports of bleached bauxite are also to be banned.
“Starting from June 2023, the government will impose a ban on exports of bauxite ore and push for development of processed bauxite in the country,” Indonesian President Joko Widodo said in a briefing broadcast on YouTube.
Photo: Reuters
This means the “added value is enjoyed in the country for the progress and welfare of the people,” he said.
Southeast Asia’s largest economy has been pursuing policies designed to create jobs and revenue by processing more of its natural resources at home, rather than just shipping out raw materials.
Jokowi, as the president is known, said this month that Jakarta would not follow a purely open economic model that he blamed for undercutting Latin America’s growth prospects for decades.
Yesterday, he also flagged that there are potentially more prohibitions on raw material shipments coming next year.
Aluminum rose 0.7 percent to US$2,390 a tonne on the London Metal Exchange as of 2:50pm in Singapore yesterday. The metal is used in everything from beverage cans to aircraft and refrigerators.
The Indonesian government has also previously flagged a possible ban on copper concentrate exports, which could hit a global market facing a large shortfall in supply as the energy transition gathers pace.
Indonesia wrested control of Grasberg, the second-biggest copper mine in the world, from international mining firms, including Freeport-McMoRan Inc, in 2018.
Indonesia has halted bauxite exports before. A ban in 2014 hit China’s aluminum industry hard, as it relied on the Southeast Asian nation for about two-thirds of its overseas supply at the time.
Chinese smelters responded by investing heavily in diversifying their sources of the mineral, particularly from Guinea.
Jakarta has already prohibited nickel ore exports. That has spurred Chinese companies to invest billions of dollars to set up operations on the islands of Sulawesi and Halmahera, where they have built refineries, smelters and a metallurgy school. The value of the country’s nickel exports has since surged.
Still, the move has triggered opposition from importing nations. Following a complaint by the EU, the WTO last month ruled that Indonesia’s ban on nickel ore exports contravened international trade rules. Jakarta is appealing the decision.
The bauxite ban “is unlikely to have any material impact” on the market, as Indonesia produced less than 5 percent of global supplies of the mineral last year, said Jayanta Roy, senior vice president at ICRA Ltd, the Indian unit of Moody’s Investors Service.
“This deficit can potentially be bridged by other large producers like Australia and Guinea,” he said.
The unfavorable global demand outlook for non-ferrous metals would also limit the impact of Indonesia’s move, Roy said.
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
STRONG INTEREST: Analysts have pointed to optimism in TSMC’s growth prospects in the artificial intelligence era as the cause of the rising number of shareholders The number of people holding shares of chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) hit a new high last week despite a decline in its stock price, the Taiwan Depository and Clearing Corp (TDCC, 台灣集保) said. The number of TSMC shareholders rose to 2.46 million as of Friday, up 75,536 from a week earlier, TDCC data showed. The stock price fell 1.34 percent during the same week to close at NT$1,840 (US$57.55). The decline in TSMC’s share price resulted from volatility in global tech stocks, driven by rising international crude oil prices as the war against Iran continues. Dealers said
DOMESTIC COMPONENT: Huang identified several Taiwanese partners to be a key part of Nvidia’s Vera Rubin supply chain, including Asustek, Hon Hai and Wistron Nvidia Corp chief executive officer Jensen Huang (黃仁勳), addressing crowds at the company’s biggest annual event, unveiled a variety of new products while predicting that its flagship artificial intelligence (AI) processors would help generate US$1 trillion in sales through next year. During a two-and-a-half-hour keynote address, Huang announced plans to push deeper into central processing units (CPUs) — Intel Corp’s home turf — and introduced semiconductors made with technology acquired from start-up Groq Inc. The company even said it was developing chips for data centers in outer space. At the heart of Huang’s speech was the message that demand for computing power
OPTIMISTIC: Inflation still has a chance of remaining below the central bank’s 2 percent alert level, as Taiwan’s economy is resilient with healthy exports, the NDC minister said Taiwan’s inflation could exceed 2 percent this year if oil prices continue to surge amid escalating tensions in the Middle East, prompting the government to reassess its economic outlook, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. DGBAS Minister Chen Shu-tzu (陳淑姿) told lawmakers at a meeting of the legislature’s Finance Committee that the agency’s earlier growth forecast of 1.68 percent in the consumer price index (CPI) and 7.71 percent for GDP this year did not account for the ongoing Middle East conflict and would need revision, if tensions persist. The previous forecast assumed an average international crude price of
RSS