Remarks of President of the Republic of Indonesia at the Inauguration of the First Bauxite Injection of the Smelter Grade Alumina Refinery (SGAR) of PT Borneo Alumina Indonesia, in Mempawah Regency, West Kalimantan Province, September 24, 2024

Bismillahirrahmanirrahim,

Assalamu’alaikum wa rahmatullahi wa barakatuh,

Good morning,

May prosperity be upon us all,

Shalom.

Distinguished Minister of State-Owned Enterprises, Minister of Investment, Head of Commission VII of the House of Representatives of the Republic of Indonesia;

Distinguished Governor of West Kalimantan Province, Regent of Mempawah;

Distinguished President Director and President Commissioner of MIND ID (Mining Industry Indonesia, a state-owned mining holding company), Mr. Hendi, Mr. Fuad Bawazier;

Distinguished President Directors and Commissioners of PT Inalum and PT Antam (two state-owned mining companies);

Distinguished Ladies and Gentlemen.

We have been exporting raw materials for more than 400 years. Since the VOC (a colonial Dutch company) era, we have exported our raw materials, while previously our country’s exports mainly consisted of various spices. And the countries that import our raw materials have all become developed countries. As the owner of the natural resources, we can only export raw materials and have not been able yet to develop into a developed country.

And developed countries are really addicted to importing our raw materials. So when we make efforts to downstream our industry, they will definitely disturb us because they certainly don’t want us to do so. Fortunately, many problems like global geopolitics, COVID-19, and the economic recession come up so that developed countries become busy with such problems, busy with the problems of carrying out their own programs, and forget about us.

This is our opportunity to build our industry, to build smelters from our own minerals, and no one will disturb us despite the fact that when we stopped our nickel exports four years ago, the European Union took us to the WTO (World Trade Organization). But after that, no one did the same. When we stopped our bauxite exports, no one complained, no one sued us. When we stopped our copper exports too, no one sued us. That’s because they were certainly busy with the problems they were facing.

As the result, the construction of the PT Borneo Alumina Indonesia smelter, which is the result of collaboration between PT Inalum and PT Antam, as we can see today, can really take place and has reached its first phase completion.

The construction of this smelter is our effort to prepare Indonesia to transform into an industrial country, by processing our own natural resources and no longer exporting raw materials. Let’s stop exporting raw materials and process them ourselves because the added value will be enjoyed by our community, our country. And the jump in the added value is very visible in the statistics.

Let’s take nickel for an example. Before 2020, our raw nickel exports reached approximately US$1.4 [billion] to US$2 billion, equal to around Rp20 trillion. Once we stopped raw nickel exports last year, we could gain US$34.8 billion, meaning that the added value worth almost Rp600 trillion became our own.

And we know that our current domestic needs for aluminum reach 1.2 million tons, 56 percent of which we import. We have the raw materials, but we still have to import 56 [percent] of our domestic needs for aluminum. Therefore, after this smelter already goes into production, we can stop importing the 56 percent, we won’t import aluminum any more, we will produce it ourselves domestically, and we won’t lose our foreign-exchange reserves. Because from here, we have to spend approximately US$3.5 billion in foreign exchange every year. It’s a very large amount, more than Rp50 trillion of our foreign exchange is lost because we import aluminum.

And I am very happy that the ecosystem from upstream to downstream for this integrated aluminum industry has really reached its first phase completion. The raw materials from Tayan are transported here. Here, the materials are processed into alumina, then sent via Kijing port to Kuala Tanjung to be processed again at PT Inalum. And we hope that with an investment of Rp16 trillion, we will really start new phases for Indonesia as an industrial country.

And the Minister of State-Owned Enterprises has also mentioned earlier that yesterday we also already started copper production worth Rp21 trillion in PT Amman, a copper smelter in Sumbawa. Then secondly, in the afternoon, we also reopened PT Freeport with an investment value of Rp56 trillion. Now we reopen it for the first phase with an investment value of Rp16 trillion.

This struggle is not easy. I know that our struggle here is also facing disturbance, but with a strong spirit and vision, today we can finish it. And this will serve as our traces of industrialization, the beginning of industrialization in our country Indonesia.

That concludes my remarks. And by saying bismillahirrahmanirrahim, this morning I hereby inaugurate the First Bauxite Injection of the Smelter Grade Alumina Refinery (SGAR) of PT Borneo Alumina Indonesia in Mempawah Regency, West Kalimantan Province.

I thank you.

Wassalamu’alaikum wa rahmatullahi wa barakatuh.

(TM/LW)