Jakarta, CNBC Indonesia – Indonesia turns out to have a source of mining “treasure” which is ranked the sixth largest in the world. The source of the “treasure” of this mine is bauxite.
Commodities that can be processed into aluminum products will certainly gain much greater state revenue if downstream industries are built.
This is because bauxite can be processed into alumina, then aluminum, then other finished products as components or raw materials for building and construction, machine tools, transportation, electricity, packaging, durable goods, and others.
By having the sixth largest bauxite reserve in the world, Indonesia must be able to take advantage of this opportunity as optimally as possible, not only selling raw goods, but also finished products with added value many times over.
Based on data from the 2020 Bauxite Booklet of the Ministry of Energy and Mineral Resources (ESDM), processing USGS data in January 2020, Indonesia’s bauxite reserves reached 1.2 billion tons or 4% of the world’s bauxite ore reserves of 30.39 billion tons.
The owner of the largest bauxite ore reserves in the world, namely Guinea, reaches 24%, then Australia controls 20%, Vietnam 12%, Brazil 9%, and then in fifth place there is Jamaica 7%.
Based on data from the Ministry of Energy and Mineral Resources, Indonesia’s measured bauxite ore resources reach 1.7 billion tons and bauxite metal 640 million tons, while proven reserves for bauxite ore are 821 million tons and bauxite metal 299 million tons.
“Indonesia has the 6th largest bauxite reserve in the world, meaning that Indonesia plays an important role in the supply of world bauxite raw materials,” the 2020 Bauxite Booklet wrote.
Director of Minerba Program Development of the Ministry of Energy and Mineral Resources (ESDM) Sunindyo Suryo said that currently there are only two bauxite-to-alumina processing plants (smelters) that have been operating. The bauxite ore input capacity is 4,564,000 tons per year.
So, what about the future? Moreover, President Joko Widodo (Jokowi) has also instructed his cabinet ranks to build a downstream mining industry, not only nickel, but also bauxite.
Sunindyo said that 12 bauxite smelters are currently being constructed into alumina. If it is completed and started to operate, the ore input capacity could increase to 35 million tons per year.
“Meanwhile, there are 12 alumina refining plants that are still under construction with an input capacity of bauxite ore reaching more than 35 million tons per year,” he told CNBC Indonesia, quoted Friday (01/10/2021).
He said that with the construction of 12 new alumina refining plants, it is hoped that all of the bauxite ore produced will be absorbed. Thus, domestic alumina production can be increased to a total of 13.9 million tons per year.
“With details, 1.3 million tons are Chemical Grade Alumina (CGA) products and 12.6 million tons are Smelter Grade Alumina (SGA) products,” he continued.
If this is realized, according to him, it is estimated that Indonesia’s bauxite ore reserves could be sufficient for 78 years. However, in the future, his party will continue to encourage exploration, so that the bauxite reserves will continue to increase and the reserves will last longer.
This increase in reserves will be carried out through exploration and verification of data and resources and reserves.
“Increased bauxite ore exploration activities are needed because the age of the reserves is around 78 years at a dry ore consumption rate of 36.9 million tons per year,” he continued.
Previously, President Joko Widodo said that the downstream nickel industry was considered successful, so in the future the downstreaming will also be carried out on other commodities, such as bauxite, gold, copper, to palm oil.
“Therefore, not only nickel, in the future we will also start for bauxite, starting with gold, copper, downstream palm oil, as many derivatives of raw materials as possible can be at least semi-finished goods, thankfully they can be finished goods ,” he explained, Thursday (26/8/2021).
He said the downstreaming of this industry is one of the three major strategies of the country’s economy in the future. Two other major strategies are the digitization of MSMEs and the green economy.
“In the future, our big economic strategy, the country’s big economic strategy, there are three things I want to convey, firstly downstreaming the industry, secondly digitizing MSMEs, and thirdly we have to start entering the green economy,” he concluded.