Indonesia Bans Bauxite Exports and Tightens Shoe Import Controls

27 March 2023

Indonesia will impose a bauxite export ban starting from June 2023. Also, the country has put tight controls on shoe imports. The ban will help Indonesia to store up the domestic processing of its mineral resources. Indonesia has also tightened customs checks at small ports to crack down on the illegal import of second-hand shoes. How this will impact the copper, aluminium and footwear market? Here is a complete picture of Indonesia’s exports of bauxite, copper & aluminium and imports of shoes.

What is the bauxite export ban?

Bauxite is the best and only material for the large-scale production of aluminium. This metal is widely used for building materials, aircraft construction, electronic conductors, consumer durables, and chemical and food-processing equipment. According to a report, Indonesia is the world’s sixth-largest bauxite producer and has the fifth-largest reserves.

Why did Indonesia put a ban on bauxite exports?

Indonesia introduces a ban on bauxite exports to replicate its success in nickel processing after banning the export of raw nickel materials in Jan 2020. The ban can help Indonesia’s economy in several ways including – more jobs can be created, foreign exchange reserves can be increased, and more equitable economic growth can be achieved.

What are the impacts of the bauxite export ban?

·         Indonesia’s Economic Growth

The Indonesian government believes that the export ban on bauxite can benefit its economy by adding more value to the domestic market, especially where the bauxite industrial chain will be developed, and where the bauxite reserves are located.

·         Development of Indonesia’s Electronic Vehicles Industry

The ban on bauxite exports is also crucial for the development of the electric vehicles industry. Similar to nickel, bauxite is also a key material used in the production of electric vehicles. Nickel is used for making lithium batteries, while aluminium made from bauxite is the material to build lightweight and strong electric vehicles.

·         Impact on China

Indonesia has been the third-largest bauxite supplier to China in recent years, behind Guinea and Australia. According to a report, China imported 17.8 million tons of bauxite from Indonesia in 2021, accounting for about 15% of its total imports. However, China’s reliance on Indonesia for bauxite export has been declining. Check out the approx. percentage share of China’s bauxite import sources below:

China: Indonesia’s Only Export Destination of Aluminium

China remains the top export destination of Indonesia’s aluminium, importing Indonesian aluminium worth USD 577 million in 2022, an increase from the previous year. Here is a year-wise analysis of Indonesia’s exports of aluminium to China.

Indonesia Exports of Copper

Indonesia exported copper worth USD 9309 million in 2022, an increase from USD 4159 million in 2021. Month-wise, the highest value of shipments was reported in November of 2021 and April of 2022. See data visualization and find out how much copper was exported by Indonesia in all months of 2021 and 2022 and compare stats.

Japan, China, South Korea, and India are the biggest destination countries of Indonesian copper. Access essential data and study and compare stats reported in 2021 and 2022.

Indonesia’s Exports of Aluminium by Month

Indonesia shipped aluminium worth USD 566 million in 2021. That dollar amount rose marginally to USD 573 million in 2022. The country recorded the highest value of shipments in November and December of 2021 and February and March of 2022. Examine and compare Indonesia’s exports of aluminium by months of 2021 and 2022.

Indonesia’s Exports of Copper and Aluminium by Quarter

Indonesia’s exports of copper and aluminium stood at USD 2151 million and USD 86 million respectively in Q4 of 2022. Both the values declined as compared to the previous quarter. Here is a detailed view of Indonesia’s exports of copper and aluminium in all quarters of 2021 and 2022.

Indonesia to Tighten Shoe Import Controls

Indonesia is to tighten customs checks at small ports to crack down on the illegal import of second-hand shoes, according to the report. This will impact Indonesia’s imports of shoes. The country imported shoes worth USD 268 million in 2022, an increase from USD 182 million in 2021. Here is a monthly analysis of Indonesia’s shoe imports reported in 2021 and 2022.

Quarter-wise, Indonesia’s shoe imports have declined in all quarters of 2022 as compared to 2021. Take a look at quarter-wise analysis of Indonesia’s shoe imports in 2021 and 2022.

China, Vietnam, and Italy are the top-most country that supply shoes to Indonesia. According to our report, Indonesia imported shoes worth USD 124 million from China in 2021 and USD 190 million in 2022. Vietnam and Italy together shipped shoes to Indonesia worth USD 44 million in 2021 and USD 67 million in 2022. See chart below to get a glimpse of Indonesia’s top 10 import sources of shoes with y-o-y comparison.

What to watch next? Indonesia is rich in multiple resources and the export ban on bauxite ore won’t be the last one. As far as shoe industry is concerned, there would not be any much impact of tightening controls over shoe imports.