After Nickel, this RI treasure is expected to be Prima Donna

Jakarta, CNBC Indonesia Indonesia is expected to reap huge profits from one of the mining commodities. However, the mineral commodity in question this time around is not nickel, but aluminum which comes from bauxite as a raw material.

Based on data from the Ministry of Energy and Mineral Resources (ESDM) which compiled the USGS data in January 2020, Indonesia has bauxite reserves of 1.2 billion tons or the sixth largest in the world, after Guinea. 24%, Australia 20%, Vietnam 12%, Brazil 9% and Jamaica 7%. Indonesia’s bauxite reserves reach 4% of the world bauxite reserves of 30.39 billion tons.

Based on data from the Ministry of Energy and Mineral Resources, the measured bauxite ore resources in Indonesia reach 1.7 billion tons and the bauxite metal 640 million tons, while the proven reserves of bauxite ore are 821 million tons and the bauxite metal 299 million tons.

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Indonesia has the sixth largest bauxite reserve in the world, which means that Indonesia plays an important role in supplying the world’s bauxite raw material,” wrote the Ministry of Energy’s bauxite brochure and of mineral resources in 2020.

Deputy for Coordination of Investments and Mining Activities at the Coordination Ministry for Maritime Affairs and Investments, Septian Hario Seto, said that in addition to nickel, the government is also encouraging minerals such as aluminum to start growing. quickly. In fact, the construction of an aluminum smelter project with a capacity of 500,000 tons per year is underway in North Kalimantan.

“There are already some automotive company they are interested in doing take off against aluminum products because this will also use one of them using hydroelectric energy“he said last week at CNBC Indonesia’s Closing Bell event.

Therefore, Seto believes that the domestic aluminum industry will develop in the future. In addition, it continued, not only in North Kalimantan, but also in the Galang Batang Special Economic Zone (SEZ), Bintan Regency, Riau Islands.

“So I think aluminum will soon catch up with nickel,” he said.

Aluminum is a product transformed from the raw material of bauxite. Aluminum is commonly used for construction / building, machine tools, transportation, electricity, packaging, durable goods and other purposes. In fact, it is estimated that each electric vehicle contains 0.25 tons of aluminum.

The manufacturing process involves the bauxite being first purified to obtain alumina, then melted again to produce aluminum. The production of one ton of alumina requires 2-3 tons of bauxite.

Currently, the largest producer and consumer of aluminum in the world is China.

In 2019, Indonesia’s demand for aluminum is 1 million tons. However, only 250,000 tons are produced domestically, so much so that Indonesia still imports 748,000 tons of aluminum.

Aluminum imports from Indonesia are still substantial, although raw materials are available domestically due to the low number of processing and refining plants (foundries). The reason is that only two bauxite-alumina processing plant foundries are now in operation. The input capacity of bauxite ore is 4,564,000 tons per year.

However, the construction of 12 bauxite smelters is currently underway. When completed and operational, the ore input capacity could increase to 35 million tons per year.

To encourage the country’s downstream growth, President Joko Widodo (Jokowi) has repeatedly said he will stop exporting raw materials, including bauxite, and build a national processing and refining plant.

If this happens and RI is able to build an aluminum factory in the country and then export it, then obviously the added value will be many times higher, as happened with nickel.

Jokowi noted that due to the ban on nickel ore exports from January 1, 2020 and exports of downstream products alone, government revenues have skyrocketed significantly from the previous only $ 1.1 billion or $ 15 trillion. of Rp in 2017 to 20.9 billion US dollars or 360 Rp billion in 2021.

[Gambas:Video CNBC]

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Jokowi: Don’t be afraid to stop exporting raw goods

(wia)


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