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Miners slam Chinese smelters for buying bauxite below benchmark price
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.
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This picture taken in Kendawangan, West Kalimantan, on February 13, 2017 shows a truck carrying material next to piles of bauxite at a bauxite mine belonging to the Harita group. (AFP/Adek Berry)
T
he 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).
Read also: Govt mulls mandatory use of benchmark price for coal exports
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.
