Southeast Asia is home to significant bauxite reserves which have, until relatively recently, mostly been exported as raw ore to China as the country grew domestic refining capacity to meet its smelter capacity developments. China’s alumina refineries have increasingly looked to external sources of bauxite due to the restrictive processing costs of its domestic diasporic reserves. With significant bauxite reserves, prior to export bans, both Indonesia and Malaysia became significant suppliers on the seaborne bauxite market.
More recently, southeast Asian countries
have looked to develop their own domestic aluminium industry to add value to
their natural resources and take advantage of globally competitive energy
sources.
Bauxite Export Bans
Indonesia
To encourage the development
of a domestic minerals processing industry, Indonesia put in place a ban on raw
ore exports, including bauxite and nickel, in early 2014. While a significant
number of nickel processing plants have been established, alumina refining
capacity has been slower to develop. In early 2017, Indonesia announced a
relaxation of the export ban, and export licences were granted to companies
demonstrating progress in developing domestic refining capacity.