Heaptalk, Jakarta — President Joko Widodo inaugurated the first bauxite injection at the Smelter Grade Alumina Refinery (SGAR) of PT Borneo Alumina Indonesia in Mempawah Regency, West Kalimantan Province, on Tuesday (09/24). This inauguration is part of the government’s efforts to end raw material exports and accelerate industrialization in the country.
“This has been a tough struggle. There were disruptions here, but we could finish it today with determination and vision. This marks the beginning of industrialization in our country, Indonesia,” said Jokowi.
Furthermore, President Jokowi emphasized the importance of downstream processing of natural resources as the key to Indonesia’s becoming an independent industrialized nation. Indonesia has exported raw materials since the VOC era, over 400 years ago. “The countries that import our raw materials have all become advanced nations. Meanwhile, we, who possess these resources but only export raw materials, have not been able to develop into a developed country,” the President remarked.
Jokowi also highlighted the reliance of developed nations on Indonesia’s raw materials, which has hindered downstream efforts. However, global situations such as geopolitical tensions, the Covid-19 pandemic, and economic recessions have allowed Indonesia to accelerate domestic industrial development. “When we stopped nickel exports, the European Union filed a complaint with the WTO, but after that, there were no more complaints. We stopped exporting bauxite and copper, and no one protested since they were preoccupied with their challenges,” he added.
Building smelters is a strategic step to halt raw material exports and begin processing natural resources domestically. This is crucial so that the Indonesian people and the nation can directly feel the added value from downstream processing. Jokowi stated, “Before 2020, nickel exports only amounted to US$1.4 to 2 billion, but after we stopped exports last year, the value reached US$34.8 billion. This means nearly Rp600 trillion in added value that we now retain.”
Domestic aluminum demand is around 1.2 million tons, but 56% still has to be imported. President Jokowi hopes that with the operation of this smelter, Indonesia will no longer need to import aluminum. “Once production is running, we can stop importing that 56%. This will prevent us from losing foreign exchange, as we currently have to spend about US$3.5 billion annually on imports,” he said.
In addition, President Jokowi praised the aluminum industry ecosystem, which has become fully integrated from upstream to downstream. PT Borneo Alumina Indonesia’s SGAR will process raw materials into alumina, which will then be sent to PT Inalum in Kuala Tanjung for further processing. “We hope this Rp16 trillion investment will truly mark a new chapter for Indonesia as an industrialized nation,” Jokowi concluded.
