Indonesia is rich in bauxite. That is no news. It has been exporting bauxite to leading aluminum-producing countries for years. That is no news either. It imposed a ban on its bauxite export back in 2023. While that creates a whirl for a while, the world has re-strategised and found its bauxite (whether the deficit has been completely replenished or not, we will come to that later)! But a product export that once generated over USD 600 million for Indonesia is now running at nil. Au contraire, the nation's alumina import (a product derived from bauxite and is further refined to produce aluminum) has peaked in the past two years (2023-2024).
In contrast, alumina, the intermediate product refined from bauxite and required for smelting aluminum, has moved in the opposite direction. Indonesia's alumina imports surged through 2023 and 2024, signalling a widening gap between domestic bauxite supply and domestic processing capability.
In the same year as the bauxite ban, the government also placed aluminum on its newly released list of critical minerals. Aluminum met every criterion set by policymakers: strategic industrial importance, economic significance, supply vulnerability and limited substitution. This classification effectively raised aluminum from a common industrial metal to a strategic resource aligned with national industrialisation plans.
This naturally raises the question: is Indonesia positioning itself to dominate the entire aluminum value chain - from ore to downstream semi-finished products - especially as low-carbon technologies reshape global manufacturing priorities?
According to data from the Ministry of Industry (Kemenperin), alumina imports were 711,000 tonnes in 2023. They climbed sharply in 2024 before easing this year.
"Alumina imports in 2024 were around 1.07 million tonnes, and they decreased in 2025, but as of August, the data still stood at 819,000 tonnes," said Yosef Danianta Kurniawan, Head of the Non-Ferrous Metals Industry Working Team, during a Forwin media briefing in Sentul, Bogor, on November 14.
To place this in context, Indonesia's total alumina requirement for domestic smelting is in the range of 1.2–1.3 million tonnes annually, meaning that imports still accounted for more than half of national alumina consumption in 2023 and 2024.
Yosef has added that alumina export performance showed positive results in the near term. According to the data from the Central Statistics Agency (BPS). He mentioned that alumina exports reached 3.66 million tonnes by August 2025. Furthermore, aluminium ingot exports also reached around 366,000 tonnes.
But the unresolved issue remains bauxite. Since the export ban, the domestic supply ecosystem has been under pressure. Surplus ore has pushed prices down, squeezed mining margins and driven stockpiling, largely because refinery capacity is not yet sufficient to absorb the volume.
All seven refineries currently facing delays are concentrated in Kalimantan, putting a bold spotlight on the regional development concerns and creating structural imbalances between mining activity and processing readiness. Infrastructure has been built ahead of downstream capacity, offering long-term advantages but creating short-term cost burdens. The decisions taken over the coming year will determine whether this surplus becomes a competitive asset or a prolonged drag.
Bauxite was not the first model of export ban and domestic industry development for Indonesia. Back in 2022, the country banned its nickel export and successfully integrated a domestic nickel processing and downstream product manufacturing industry.
However, for the aluminium sector, the alumina and aluminium sector's plant and production development have progressed more slowly than anticipated. According to 2024 data, Indonesia's bauxite reserves stand at 1 billion tonnes. The country's ambitious plan to produce everything in-house, from bauxite to billet, is a key element of the government's broader electric vehicle (EV) strategy.
Despite this, long-term demand indicators are highly favourable. Indonesia's aluminium consumption is projected to increase by about 600 per cent over the next three decades. EV and renewable energy growth will drive most of this demand. For instance, every 1 MW of installed solar capacity demands about 21 tonnes of aluminium, and each EV consists of 250-450 kg of the metal. Based on Indonesia's target to build 600,000 EVs by 2030, national EV-related aluminium demand could exceed 150,000 tonnes annually.
To augment this growth, Indonesia aims to lift aluminium output to 900,000 tonnes per year by 2030, supported by major refinery expansions. SGAR Phase I currently provides 1 million tonnes of alumina annually, while Phase II is designed to add another 2 million tonnes, pushing total domestic SGA capacity toward 3 million tonnes.
Still, the mismatch between mining output and refinery progress persists. With bauxite production approvals outpacing processing capacity, the market finds itself in a transitional stage.
RKAB-approved bauxite production for 2025: 12–15 million tonnes
Total mining capacity: 25–30 million tonnes
Utilisation: 40–50 per cent
On the refining side, utilisation is also far below expectation:
Operational alumina capacity (2023–2024): ~5.3 million tonnes
Corresponding bauxite requirement: 16.5 million tonnes annually
Projected 2025 requirement: 16.5–18.5 million tonnes
Seven refinery projects in Kalimantan have stalled due to financing gaps and investor hesitancy:
PT Dinamika Sejahtera Mandiri – Sanggau, West Kalimantan
PT Laman Mining – Ketapang, West Kalimantan
PT Kalbar Bumi Perkasa – Sanggau (permit revoked)
PT Parenggean Makmur Sejahtera – Kotawaringin Timur
PT Persada Pratama Cemerlang – Sanggau
PT Quality Sukses Sejahtera – Pontianak
PT Sumber Bumi Marau – Ketapang
These delays collectively hold back an estimated 9 million tonnes of alumina capacity and suppress 24 million tonnes of potential bauxite demand each year.
Industry projections suggest that Indonesia could rebalance the bauxite–alumina market within 18-24 months, provided stalled refineries secure funding and regulatory momentum continues. If all planned refineries reach commissioning, Indonesia could require nearly 30 million tonnes of bauxite annually by 2026–2027, finally aligning its mining output with downstream capacity and strengthening the nation's strategic position in the global aluminum value chain.
Note: This article is published in accordance with an article exchange agreement between Mysteel and AL Circle.
