Bauxite producer IBB Mining Company from Indonesia is planning to restart production from August 2021. The company is aiming to produce 300,000mt of bauxite every month.
China, the largest aluminum producer in the world, was the biggest bauxite importer from Indonesia before 2014. In 2014, Indonesia banned exports of raw ores to encourage value addition and refine ore to alumina. A lack of refineries, however, forced many bauxite miners to halt operations.
The Indonesian government relaxed this ban in 2017. There were talks of re-imposing the ban in 2022, which has now been pushed to June 2023.
IBB in Central Kalimantan, Indonesia, was operating before the 2014 raw ore export ban. After it restarts operations, the miner plans to export 3-5mn mt of bauxite in three months. The company produces bauxite having Al2O3 49-52pc, SiO2 4pc max, and currently holds about 250,000mt of inventory.
The current transaction price of Indonesian bauxite Al2O3 4pc min and ReSiO2 3.5pc max is $51.5-52.5/dry mt cif China. Considering the increased freight rates and the recovery in demand from China, prices could rise in the next two weeks.