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The Ban on The Export of Raw Mineral Material Bauxite Will Take Effect in June 2023 in Indonesia

President Joko Widodo announced that Indonesia will impose a bauxite export ban starting in June 2023 to promote domestic processing of its mineral resources. The ban is in line with Minister of Energy and Mineral Resources Regulation No. 17 of 2020 concerning the Third Amendment to Energy and Mineral Resources Regulation No. 25 of 2018 concerning Mineral and Coal Mining Business ("MEMRR 17/2020") and is based on four considerations: increasing value added for the domestic economy, creating new job opportunities, increasing foreign exchange earnings, and promoting more equitable economic growth in Indonesia.

Indonesia is the world's sixth-largest bauxite producer and has the fifth-largest reserves, according to a US Geological Survey. Bauxite is the primary material for large-scale production of aluminum, a metal that is widely used for aircraft construction, building materials, consumer durables, electronic conductors, and chemical and food-processing equipment.

Under the ban, exports of bauxite ore and bleached bauxite will be prohibited. The Government hopes that, as a result of the ban, to shore up the domestic processing of its mineral resources. The ban is expected to benefit regions where bauxite reserves are located and where the bauxite industrial chain will be developed, huge economic growth could be expected. Indonesia introduced the bauxite ban to replicate its success in nickel processing after banning the export of raw nickel material in January 2020.

Similar to nickel, bauxite is a key material in the production of electric vehicles. While nickel is used for making lithium batteries, aluminum made from bauxite is used to build lightweight and strong electric vehicles. The ban will prohibit the export of washed bauxite that has undergone a washing process. In addition, exports of bleached bauxite will also be banned. Currently, holders of Mining Business Licenses (IUP) for washed bauxite with a grade above 42% are allowed to export it until June 2023, as regulated by Article 46 of MEMRR 17/2020.

If you need consultation on these issues, Schinder Law Firm is one of the many corporate law firms in Indonesia. Our professional civil lawyers strive to understand your unique needs and concerns, and will develop creative and cost-effective ways to assist you. Contact us at info@schinderlawfirm.com today to schedule a consultation to discuss your situation and how we can help.

Author: Dewi Susanti

Schinder Consultant London Ltd.


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