U.S. Department of the Interior

U.S. Geological Survey

Fact Sheet 2016–3072

September 2016

Resource Nationalism in Indonesia—Effects of the

2014 Mineral Export Ban

Introduction

Resource nationalism encompasses 

a broad range of political and economic 

actions taken by Governments to regulate 

the extraction of natural resources 

within their borders. Policies such as 

increased tariffs or export restrictions 

can have far-reaching economic 

effects on international trade. As the 

Governments of several developing 

countries consider enacting nationalistic 

policies, an examination of the 2014 

mineral export ban in Indonesia provides 

an instructive example of the possible 

impacts of resource nationalism. 

Significant changes in the production 

and trade of unprocessed (that is, ores 

and concentrates) and processed (that is, 

refined metal) aluminum, copper, and 

nickel before and after the export ban 

form the basis of this study.

The U.S. Geological Survey (USGS) 

National Minerals Information Center 

(NMIC) tracks production and trade of 

mineral commodities between producer 

and consumer countries. Materials flow 

studies clarify the effects of an export 

ban on different mineral commodities 

by assessing changes in production, 

processing capacity, and trade. Using 

extensive data collection and monitoring 

procedures, the USGS NMIC investigated 

the effects of resource nationalism on 

the flow of mineral commodities from 

Indonesia to the global economy. 

Legislation

In 2009, the Indonesian Parliament 

passed a new Mining Law (Law No. 4) 

on Mineral and Coal Mining, to come 

into full effect in 2014. Among the 

requirements of Law No. 4 was the 

prohibition of exporting unprocessed 

ores, the obligation to process and refine 

the ores in Indonesia, and the requirement 

to pay higher export tariffs for specified 

mineral commodities. Also, foreign 

shareholders in companies were required 

to divest up to 51 percent of shares 

to Indonesian entities within 10 years 

from the commencement of commercial 

operation. The intent was to increase 

the production of higher value products 

in order to boost Government revenue 

derived from the mineral sector.

In 2014, the Government amended 

the principal regulations of the mining 

law and issued temporary permits for 

exports of partially processed minerals. 

The processing requirements for many 

minerals were decreased for a 3-year 

period and export duties were imposed 

at a progressive rate commencing at 

20 percent in 2014 and increasing to 

60 percent by 2017. For example, purity 

requirements for copper were reduced 

to 15 percent from 99 percent and 

copper concentrates were subject to an 

export duty of 25 percent. Processing 

requirements, expected to increase in 

2017, are currently being reviewed by 

the Government (Asmarini, 2016).

Mine Production, Processing, 

and Trade

In recent decades, Indonesia has 

been a major producer and exporter 

of several mineral commodities, 

including bauxite, copper concentrate, 

and nickel ore (fig. 1; all values for 

copper concentrate and nickel ore are 

reported as contained metal). Relative 

to total world mine production in 2013, 

Indonesia accounted for 20 percent of 

bauxite production, 3 percent of copper 

in concentrate production, and 31 percent 

of nickel in ore production (Bray, 2016b; 

Brininstool, 2016; Kuck, 2016b). 

Following the ban on unprocessed 

mineral exports in January 2014, 

production of bauxite and nickel ore 

decreased dramatically, whereas copper 

concentrate output decreased only 

moderately. Relative to total world mine 

production in 2014, Indonesia accounted 

for 1 percent of bauxite production, 

2 percent of copper in concentrate 

Figure 1. Indonesia’s annual 

mine production of bauxite, copper 

concentrate, and nickel ore from 2009 

through 2014 labeled with Indonesia’s 

percentage of annual world production 

(Bray, 2015b, 2016b; Brininstool, 2015, 

2016; Kuck, 2016a, b).

production, and 7 percent of nickel in ore 

production (Bray, 2016b; Brininstool, 

2016; Kuck, 2016a). Although Indonesia 

was a major producer and the world’s 

leading exporter of refined tin metal in 

2013, exports of unprocessed tin ore had 

been prohibited since 2002 and were 

not directly affected by the 2014 ban 

(Tse, 2006; Anderson, 2015). Refined 

tin production in Indonesia has declined 

in recent years owing to low prices 

(Anderson, 2016). Commodity, in million metric tons 

0 

20 

40 

60 

Bauxite, gross weight 

0 

0.5 

1.0 

1.5 

Copper concentrate, copper content 

0 

0.2 

0.4 

0.6 

0.8 

1.0 

1.2 

2009 2010 2011 

Year

2012 2013 2014 

Nickel ore, nickel content 

7% 

12% 

16% 

12% 

20% 

1% 

6% 

5% 

3% 

2% 

3% 

2% 

14% 

18% 

24% 

27% 

31% 

7% 
Bauxite, Alumina, and Aluminum

Bauxite, an aluminum ore, occurs 

as intensely weathered deposits in 

tropical regions. In 2013, Indonesia 

produced a record output of 55.7 million 

metric tons (Mt) of bauxite, surpassing 

China to become the world’s secondleading producer after Australia (fig. 1; 

Bray, 2016b). As a result of the mineral 

export ban, bauxite production fell 

by more than 95 percent to 2.6 Mt in 

2014 and an estimated 1 Mt in 2015 

(Bray, 2016a). Aluminum smelter output 

remained unchanged at 250,000 metric 

tons (t) in 2013 and 2014 (fig. 2; 

Bray, 2015a). 

Bauxite export revenue declined 

from $1.3 billion in 2013 to $46 million 

in 2014 (fig. 3; United Nations Statistics 

Division, 2016). Relative to the total 

value of exports of mineral commodities 

containing aluminum, copper, and nickel, 

in processed and unprocessed forms, 

bauxite and aluminum exports decreased 

from 20 percent of Indonesia’s exports in 

2013 to only 6 percent in 2014. China’s 

aluminum industry consumed 97 percent 

of the bauxite exported by Indonesia 

between 2005 and 2014. Indonesia’s 

record bauxite production in 2013 was 

attributed to stockpiling by Chinese 

alumina refineries in anticipation of the 

export ban (Bray, 2015b). Following 

implementation of the ban, bauxite 

production in China increased, bauxite 

stocks were drawn down, and production 

in Australia and Malaysia increased to 

meet demand from China (Rusmana, 

2015; Bray, 2016a).

The dramatic decrease in bauxite 

production after the export ban reflected 

the lack of downstream processing 

capacity and poor integration between 

bauxite mines, alumina refineries, 

and aluminum smelters in Indonesia. 

Indonesia’s bauxite producers include 

state-owned enterprise PT Aneka 

Tambang Tbk (PT Antam), as well as 

foreign-owned companies and numerous 

small mining operations. Prior to the ban, 

all bauxite produced in Indonesia was 

exported for processing, as no alumina 

refineries and only one aluminum smelter 

operated within the country. Stateowned enterprise PT Indonesia Asahan 

Aluminium (PT Inalum) imported 

alumina to produce aluminum metal at its 

Kuala Tanjung smelter in North Sumatra. 

In anticipation of the export ban, 

construction of several new facilities for 

domestic bauxite or alumina processing 

was proposed; among these were four 

alumina refineries and two aluminum 

smelters with reported design capacities 

(table 1). In 2014, PT Antam produced 

bauxite for a chemical-grade alumina 

refinery in Tayan, West Kalimantan, to 

be operated by PT Indonesia Chemical 

Alumina, a jointly controlled entity 

owned by PT Antam (80 percent) 

and Japan-based Showa Denko K.K. 

Figure 2. Flow diagrams of Indonesia’s aluminum, copper, and nickel industries during 2013 and 2014. Quantities are in thousand metric tons of 

metal content, except for bauxite, which is in gross weight; alumina is produced from bauxite at a ratio of 1 to 2 and has an aluminum content of 

approximately 50 percent. Arrow widths are proportional to quantity of contained metal, except for bauxite in 2013, which is scaled to 10 percent 

of its actual width. Sources: Bray, 2015a, 2016b; Brininstool, 2016; Kuck, 2016a, b; PT Aneka Tambang Tbk, 2016a, p. 103; PT Vale Indonesia Tbk, 

2016, p. 112; United Nations Statistics Division, 2016; Wacaster, 2015.

2013 2014

258 285 Aluminum 250 Aluminum 155 Aluminum 250 Aluminum 107

Unreported 216

 flows

 1,300

Bauxite

mine

production

55,700

Copper mine

production

504

Nickel mine

production

834

Nickel mine

production

177

Laterite

ore

exports

740

Laterite

ore

exports

81

Ferronickel

production

18

Ferronickel

production

17

Nickel matte

production

76

Nickel matte

production

79

Copper mine

production

373

Copper

concentrate

imports 15

Copper

concentrate

imports 5

Copper

concentrate

exports

Copper

concentrate

exports

141

Bauxite

mine

production

2,600

Bauxite

exports

57,000

Bauxite

exports

2,085

Unreported

flows

8

Unreported

flows

4

Unreported

flows

5

Refined

copper

export

71

Refined

copper

export

110

Refined

copper

imports

89

Refined

copper

imports

109

Alumina

imports

Alumina

imports

Aluminum

imports

Aluminum

imports

61

Aluminum

exports

143

Unreported

flows

Stockpiled 35

for chemicalgrade alumina

production

515

Aluminum

exports

95

203

Copper

concentrate

232 Copper anode 214

Smelter Refinery Refinery

Smelter

Smelter Refinery Smelter Refinery

Smelter

Copper anode 232

Smelter

Refined copper 143

301

Copper

concentrate

 94 96

Refined copper 122 

2
(20 percent). The share of foreign 

ownership complies with new regulations 

and Showa Denko K.K. has an offtake 

contract to sell 70 percent of the 

production capacity (Jensen, 2015). 

The Tayan refinery has the capability to 

consume roughly 850,000 wet metric 

tons per year (t/yr) of bauxite to produce 

300,000 t/yr of chemical-grade alumina 

at full capacity; commercial operations 

commenced in 2015 with production of 

nearly 70,000 t (PT Aneka Tambang Tbk, 

2016a, p. 28). At full production, the 

amount of bauxite consumed annually 

by the Tayan refinery represents less 

than 2 percent of 2013 production and 

is therefore not expected to significantly 

increase mine capacity utilization by 

the domestic bauxite industry. 

In addition to the chemical-grade 

alumina refinery, PT Antam partnered 

with PT Inalum and Aluminum 

Corporation of China Ltd. (Chalco) to 

develop a smelter-grade alumina refinery 

in Mempawah, West Kalimantan, with 

a capacity of 2 million metric tons 

per year (Mt/yr) of alumina to supply 

PT Inalum’s smelter (PT Aneka Tambang 

Tbk, 2016a, p. 211; 2016b). With the 

construction of an additional aluminum 

smelter in Kuala Tanjung, North Sumatra, 

PT Inalum aims to double aluminum 

production from a current capacity of 

250,000 t/yr to a planned 500,000 t/yr by 

2020 (Amirio, 2015). PT Well Harvest 

Winning Alumina Refinery, a joint 

venture owned by Harita Group, China 

Hongqiao Group Ltd., and other partners, 

plans to produce 4 Mt/yr of smeltergrade alumina by 2021 (Rusmana, 

2015). Trial production at the refinery 

began in March 2016 and output is 

expected to reach 2 Mt/yr of alumina 

by the end of 2017 (Yam, 2016). In 

January 2016, China-based Shandong 

Nanshan Aluminium Co., Ltd. began 

constructing a $2 billion manufacturing 

complex on Bintan Island, Riau Islands, 

with 2.1 Mt/yr of alumina refining 

capacity and 570,000 t/yr of aluminum 

smelting capacity (Jakarta Globe, 2015). 

The three forthcoming projects would 

significantly increase domestic refining 

capacity to 8 Mt/yr of alumina and 

smelting capacity to over 1 Mt/yr of 

aluminum in the next 5 years. With 

the addition of several other planned 

projects, Indonesia’s domestic alumina 

and aluminum industries may consume 

15 to 20 Mt/yr of bauxite by 2020.

Copper

Copper mine production decreased 

from 504,000 t of copper contained 

in concentrate in 2013 to 374,000 t in 

2014, reducing Indonesia’s share of 

world copper production from 3 percent 

to 2 percent (fig. 1; Brininstool, 2016). 

Copper is mined at the Batu Hijau 

Mine on the island of Sumbawa, West 

Nusa Tenggara, by PT Newmont Nusa 

Tenggara (PT Newmont) and in the 

Grasberg minerals district in Papua 

Province, by PT Freeport Indonesia 

(PT Freeport). Prior to shipping, copper 

ore is processed into concentrate with 

an average copper content of 25 percent 

to 30 percent. In general, approximately 

one-half of Indonesia’s annual copper 

concentrate production is processed 

domestically and the remainder is 

exported (fig. 2). By value, Japan 

consumed 35 percent of the copper 

concentrate exported from 2005 through 

2014, whereas India, South Korea, and 

Spain each consumed about 16 percent; 

the share of exports destined for China 

increased from 4 percent in 2005 to 

23 percent in 2014 (United Nations 

Statistics Division, 2016).

Temporary shutdowns and legal 

disputes between the Government 

of Indonesia and the foreign-owned 

mining companies contributed to a 

decline in production in 2014 (Taylor, 

2014). U.S.-based Newmont Mining 

Corporation and Japan-based Sumitomo 

Corporation together own 56 percent of 

PT Newmont, having previously divested 

44 percent ownership to Indonesian firms 

and offered the remaining 7 percent to the 

Government of Indonesia to comply with 

legal requirements. On June 30, 2016, 

Newmont and Sumitomo announced 

they would sell any remaining economic 

interest in Batu Hijau to Indonesian 

company PT Amman Mineral Internasional (Newmont Mining Corporation, 

2016; Schonhardt and Hufford, 2016). 

U.S.-based Freeport-McMoRan Inc. 

currently owns a 90.64-percent stake 

in PT Freeport and agreed to divest 

an additional 20.64-percent interest 

to the Indonesian entities as part of a 

memorandum of understanding with 

the Government of Indonesia, which 

currently owns 9.36 percent (FreeportMcMoRan Inc., 2014). In terms of 

value, copper dominated Indonesia’s 

mineral exports, with copper concentrate 

accounting for 93 percent of unprocessed 

mineral export value in 2014, even 

though Indonesia did not export copper 

concentrate from February through July 

of 2014 (fig. 3; Badan Pusat Statistik). 

Most of the value is added through 

Figure 3. Indonesia’s monthly exports of unprocessed mineral ores and processed metals

from December 2012 through December 2014, based on Indonesia’s reported trade (Badan 

Pusat Statistik, 2016).

0 

200 

400 

600 

800 

1,000 

1,200 

D J F M A M J J A S O N D J F M A M J J A S O N D

2012 2013 2014 

Value, in millions of U.S. dollars 

Month and year

January 2014

export ban

implemented

August 2014

copper concentrate

export permits issued

Unprocessed 

EXPLANATION

Bauxite

Copper con-

 centrate

Nickel ore 

Processed 

Aluminum

Copper

Ferronickel

Nickel matte 

3
mining and concentrating copper 

ore rather than through smelting and 

refining (U.S. Agency for International 

Development, 2013, p. 13). Indonesia’s 

only copper smelter and refinery, 

located in Gresik, East Java, is operated 

by PT Smelting, which is owned by 

a consortium of Japanese companies 

(75 percent) and PT Freeport Indonesia 

(25 percent) (table 1; PT Smelting, 

undated). The Gresik refinery has a 

capacity of 300,000 t/yr and produced 

214,000 t of refined copper in 2013 

(Brininstool, 2016; PT Smelting, 

undated). After pursuing international 

arbitration and negotiations with the 

Government of Indonesia, copper 

producers PT Freeport and PT Newmont 

agreed to build additional smelting 

capacity in exchange for permission 

to export copper concentrate on a 

temporary basis until 2017. After 

the implementation of the ban in 

January 2014, export permits were not 

issued until August 2014, resulting in 

a 6-month hiatus in exports. Exports 

of copper concentrates amounted to 

715,000 t worth $1.7 billion in 2014, 

compared with the 1,454,000 t worth 

$3 billion exported in 2013 (United 

Nations Statistics Division, 2016). 

In order to renew its export permit 

in 2015, PT Newmont also agreed to 

transfer $3 million to PT Freeport for 

domestic smelter development (Jensen 

and Asmarini, 2015a). Considering 

Indonesia’s relatively small share of the 

global copper market, export restrictions 

are not expected to disrupt global copper 

prices or supplies. 

Nickel

Nickel laterites containing 

1 to 2 percent nickel were processed 

domestically in Indonesia and exported 

as direct shipping ore. Nickel mine 

production fell from a record high 

of 834,200 t of contained nickel in 

2013 to 177,000 t in 2014 (figs. 1, 2; 

Kuck, 2016a, b). Indonesia accounted 

for 31 percent of world nickel mine 

production in 2013, but only 7 percent 

in 2014. In 2014, 4.2 Mt of nickel 

ore was exported before the ban went 

into effect in January, compared 

with the 64.8 Mt exported in 2013 

(United Nations Statistics Division, 

2016). By value, China consumed 

71 percent of the nickel ore exported 

by Indonesia over the past decade, 

increasing from 0.2 percent of the total 

in 2005 to 96 percent in 2014. Over 

the same 10 years, Japan accounted 

for an average of 16 percent of nickel 

ore exports, and all others countries 

accounted for an average of 13 percent.

Direct shipping ore and processed 

forms of nickel accounted for 36 percent 

of Indonesia’s total mineral export value 

in 2013 and 34 percent in 2014, despite 

the ban on ore exports (United Nations 

Statistics Division, 2016). Because nickel 

smelting adds substantial value, export 

revenue from nickel is dominated by 

processed forms. For example, less than 

15 percent of the quantity of contained 

nickel production in 2013 was processed 

domestically into ferronickel and nickel 

matte, yet these products contributed 

41 percent of the value of nickel exports 

(fig. 3; Kuck, 2016b; United Nations 

Statistics Division, 2016).

Demand for nickel ores since 2006 

was driven mainly by increased nickel 

Table 1. Major processing facilities and expansion projects completed or under construction in Indonesia since the 2014 mineral export ban.

[Capacities are in metric tons per year. Abbreviations: PT Antam, PT Aneka Tambang Tbk; PT Inalum, PT Indonesia Asahan Aluminium; Chalco, Aluminum Corporation of China Ltd.]

Commodity Operating company Location Province Capacity Reference

Alumina PT Indonesia Chemical Alumina Tayan West Kalimantan 300,000 PT Aneka Tambang Tbk (2016a)

Alumina PT Antam, PT Inalum, Chalco Mempawah West Kalimantan 2,000,000 PT Aneka Tambang Tbk (2016b)

Alumina PT Well Harvest Winning Alumina Refinery Ketapang West Kalimantan 4,000,000 Rusmana (2015)

Alumina Shandong Nanshan Aluminium Co., Ltd. Bintan Riau Islands 2,100,000 Jakarta Globe (2015)

Aluminum Shandong Nanshan Aluminium Co., Ltd. Bintan Riau Islands 570,000 Jakarta Globe (2015)

Aluminum PT Inalum Kuala Tanjung North Sumatra 500,000 Amirio (2015)

Copper, refined PT Smelting Gresik East Java 300,000 PT Smelting (undated)

Nickel in matte PT Vale Indonesia Sorowako South Sulawesi 120,000 PT Vale Indonesia Tbk (2016)

Nickel sulfide PT Vale Indonesia Pomalaa Southeast Sulawesi 15,000 PT Vale Indonesia Tbk (2016)

Nickel oxide PT Vale Indonesia Bahodopi Central Sulawesi 18,000 PT Vale Indonesia Tbk (2016)

Nickel PT Weda Bay Nickel East Halmahera North Maluku 65,000 PT Aneka Tambang Tbk (2016a)

Nickel in ferronickel PT Karyatama Konawe Utara Langgikima Southeast Sulawesi 40,000 Jensen and Asmarini (2015b)

Nickel in ferronickel PT Antam Pomalaa Southeast Sulawesi 30,000 PT Aneka Tambang Tbk (2016a)

Nickel in ferronickel PT Antam East Halmahera North Maluku 15,000 PT Aneka Tambang Tbk (2016a)

Nickel pig iron PT Indoferro Cilegon Banten 250,000 PT Indoferro (2014)

Nickel pig iron PT Cahaya Modern Metal Industri North Konawe Southeast Sulawesi 8,640 Asmarini (2015)

Nickel pig iron PT Sulawesi Mining Investment Morowali Central Sulawesi 1,200,000 Jensen and Burton (2015)

4
pig iron (NPI) production in China. 

NPI contains less than 15 percent nickel 

and provides a cheaper alternative to 

pure nickel for the production of stainless 

steel. In anticipation of the ban on nickel 

ore exports, Chinese NPI producers 

stockpiled Indonesian ores. Since the 

implementation of the ban, Chinese 

demand for nickel was met largely by 

drawing on stockpile inventories and 

from increased production of lower grade 

ore in the Philippines. Although analysts 

expected global nickel supply shortfalls 

as Philippine ore grades decline and 

Chinese NPI production slows, a global 

surplus remains (Home, 2016).

Approximately 100,000 t of 

contained nickel was processed 

domestically in 2013, equivalent to 

about 12 percent of Indonesia’s total 

nickel mine production (Kuck, 2016b). 

In 2013 and 2014, PT Vale Indonesia 

Tbk produced approximately 80,000 t/yr 

of nickel in nickel matte (78 percent 

nickel content) at its Sorowako smelter 

in South Sulawesi, and exported it 

to Japan. As part of its agreement 

with the Government of Indonesia, 

PT Vale Indonesia will increase nickel 

production capacity at Sorowako 

to 120,000 t/yr of nickel, develop a 

15,000-t/yr processing facility in Pomalaa, 

Southeast Sulawesi, and contribute 

to the development of a 18,000-t/yr 

processing facility in Bahodopi, Central 

Sulawesi (table 1; PT Vale Indonesia 

Tbk, 2016, p. 157, 163, 165). PT Antam 

produces approximately 20,000 t/yr of 

nickel in ferronickel (20 to 25 percent 

nickel content) at its Pomalaa smelter 

and exports its products to China, 

Europe, India, South Korea, and 

Taiwan (PT Aneka Tambang Tbk, 

2016a, p. 15–17). In 2015, PT Antam 

planned to increase capacity at its 

Pomalaa smelter to 30,000 t/yr and 

construct a new ferronickel smelter in 

East Halmahera, North Maluku, with a 

capacity of 15,000 t/yr of nickel by 2018 

(PT Aneka Tambang Tbk, 2016, p. 140). 

PT Weda Bay Nickel, which is 90 percent 

owned by Singapore-based Strand 

Minerals Pte., Ltd. and 10 percent owned 

by PT Antam, plans to produce 65,000 t/yr 

of nickel by sulfuric acid leaching of 

ore in East Halmahera, North Maluku 

(PT Aneka Tambang Tbk, 2016a, p. 225).

In addition to the planned nickel 

processing facilities and expansion 

projects, several NPI facilities are 

under development or have expansion 

plans. PT Indoferro began producing 

NPI with 2 to 5 percent nickel content 

in 2012 at its 250,000-t/yr facility in 

Cilegon, Banten, on the island of Java 

and aimed to increase production from 

8,000 t of contained nickel in 2014 to 

12,000 t in 2015 (Jensen and Burton, 

2014; PT Indoferro, undated). PT Cahaya 

Modern Metal Industri began producing 

NPI in 2013, began exports to China in 

2014, and received a 6-month permit to 

export 8,640 t of NPI in 2015 (Jensen 

and Burton, 2014; Asmarini, 2015). 

Backed by PT Bintang Delapan Mineral, 

China-based Tsingshan Holding Group, 

and Japan-based Hanwa Co., Ltd.,

PT Sulawesi Mining Investment began

production at its Morowali facility in

January 2015, operating at 60 to 70 percent

of its capacity of 300,000 t/yr of NPI 

(Jensen and Burton, 2014, 2015). 

PT Sulawesi Mining Investment 

expects to complete construction of 

three smelters in June 2017 and plans 

to increase production capacity to 

1.2 Mt/yr of NPI containing 120,000 t 

of nickel. PT Karyatama Konawe 

Utara, a subsidiary of China-based 

Hanking Industrial Group Co., Ltd., 

plans to expand ferronickel production 

to 40,000 t/yr (Jensen and Asmarini, 

2015b). Several additional nickelprocessing facilities are expected to 

become operational in 2016, adding 

767,000 t/yr of ferronickel production 

(Rusmana and Listiyorini, 2014; 

Jensen and Asmarini, 2015b). 

Over the next few years, increased 

ferronickel, nickel matte, and nickel 

pig iron production may amount to 

400,000 t/yr of nickel, less than one-half 

of peak mine production in 2013. These 

advanced-stage projects represent a 

subset of the nearly 40 nickel smelters 

proposed after the ban; however, 

construction will depend on favorable 

market conditions.

Impact and Outlook

Owing in part to the mineral export 

ban, Indonesia’s gross domestic product 

(GDP) contracted by 2.4 percent from 

2013 to 2014 (World Bank, 2015). The 

combined export value of unprocessed 

(that is, ores and concentrates) and 

processed (that is, refined metal) 

aluminum, copper, and nickel totaled 

$8 billion or nearly 1 percent of 

Indonesia’s GDP in 2013 and decreased 

to $4.1 billion or approximately 

0.5 percent of GDP in 2014 (World Bank, 

2015; United Nations Statistics Division, 

2016). The total value of processed 

aluminum, copper, and nickel exports 

increased slightly from $1.9 billion 

in 2013 to $2.3 billion in 2014. 

Unprocessed mineral exports of bauxite, 

copper concentrate, and nickel ore totaled 

$6 billion in 2013 and decreased by 

70 percent to $1.8 billion in 2014. Thus, 

nearly two-thirds of the $6.5 billion 

decrease in total exports from Indonesia 

was directly attributable to the ban on 

unprocessed mineral exports in 2014.

Ultimately, the result of Indonesia’s 

mineral export ban will depend on the 

balance of short-term losses in revenue 

and employment against longer term 

development of downstream processing 

capacity. The export ban stimulated an 

increase in foreign direct investment in 

2014 as over 50 smelter projects were 

planned (Sambijantoro, 2014). With 

slowing economic growth in China and 

lower commodity prices, the valueadded benefit derived from additional 

processing capacity may not offset the 

investment required and loss of export 

revenue (Winzenried and Adhitya, 2014). 

Policies enacted by Indonesia 

reflect a broader trend among developing 

counties seeking greater control over 

the extraction of natural resources 

(Kean, 2014). The full effect of 

Indonesia’s mineral export ban on the 

global economy may have been offset 

by alternative sources of raw material 

supplied by other countries. Following 

the ban in Indonesia, bauxite production 

in Malaysia and nickel ore production in 

the Philippines increased dramatically 

owing to demand from China (Jensen and 

Burton, 2014; Rusmana, 2015). However, 

environmental degradation prompted 

a temporary moratorium on bauxite 

mining in Malaysia and may prompt 

new regulations on open-pit mining in 

the Philippines (Serapio and Dela Cruz, 

2016; Sipalan and Chow, 2016). With 

natural resource policies having been 

proposed in the Philippines, South Africa, 

and Zambia (Kean, 2014), the impacts of 

resource nationalism in Indonesia may be 

closely watched by other producers and 

remain a subject of great interest.

5
ISSN 2327-6916 (print)

ISSN 2327-6932 (online)

http://dx.doi.org/10.3133/fs20163072

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For more information, contact: 

Director, National Minerals

Information Center 

U.S. Geological Survey 

12201 Sunrise Valley Drive 

988 National Center 

Reston, VA 20192 

By Graham W. Lederer

Email: nmicrecordsmgt@usgs.gov 

Or visit the USGS Minerals Information

Web site at 

http://minerals.usgs.gov/minerals/

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