JakartaPost-May 6, 2025
The Indonesia Bauxite Association (ABI) has raised concerns that most Chinese smelters have refused to follow the benchmark price set by the Energy and Mineral Resources Ministry when purchasing bauxite ore from local miners. This practice has pushed several miners out of business, according to the association, while others that have remained operational either have the large-scale capacity to do so or are simply operating to keep equipment running and preserve jobs. “Out of 69 bauxite miners, only 15 to 20 are still actively producing,” ABI chairman Ronald Sulistyanto said on Sunday, as quoted by Kompas.com. Only a few exceptions remain committed to paying prices close to the government-set benchmark. Among them is the PT Well Harvest Winning (WHW) alumina refinery, a joint venture involving four entities, namely China’s Hongqiao Group and Shandong Weiqiao Aluminium & Electricity, Hong Kong-based Winning Investment and Indonesia’s PT Cita Mineral Investindo (Harita Group). Since June 2023, the government has banned bauxite ore exports to spur domestic downstream development, particularly in the aluminium industry. As a result, miners are now restricted to selling their output to local smelters, many of which are backed by Chinese investors through foreign direct investment schemes. The Energy and Mineral Resources Minister Bahlil Lahadalia issued Decree No. 72/2025 in February that requires miners to sell their produces at a government-set benchmark price, which is higher than the reference price point previously used by miners. The minister reasoned the policy would help Indonesia get a better price for its natural resources, which in turn could translate into higher state revenue. ABI said the regulation lacks proper enforcement, allowing buyers to ignore the mandated pricing. “The biggest challenge right now for bauxite and other minerals is getting buyers to comply with the benchmark price,” Ronald stated. Read more at: https://www.thejakartapost.com/business/2025/05/06/miners-slam-chinese-smelters-for-buying-bauxite-below-benchmark-price.html
