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Indonesia has become the world’s fifth-largest bauxite producer!
2025-08-03
In 2024, Indonesia successfully ranked as the world’s fifth-largest bauxite producer. According to data from the U.S. Geological Survey (USGS), Indonesia’s bauxite output reached 32 million tonnes, placing it behind Guinea (130 million tonnes), Australia (100 million tonnes), China (93 million tonnes), and Brazil (33 million tonnes).
Of the global total production of approximately 450 million tonnes, Indonesia accounts for about 7.11% of the world’s bauxite supply. This position underscores Indonesia’s significant potential as a major supplier of raw materials to the global aluminum industry.
However, the key question is whether Indonesia can leverage this strategic position to compete along the higher‑value segments of the aluminum industry value chain.
1. Indonesia’s alumina and aluminum production remains limited.
As the primary raw material for producing alumina (which is subsequently processed into aluminum), bauxite plays a crucial role in global manufacturing.
However, for a long time, most of Indonesia’s bauxite has been exported in its raw form or subjected to only partial processing. As a result, the industry’s added value has largely accrued to other countries that possess more advanced processing infrastructure.
To address this issue, starting in 2023, the Indonesian government implemented a policy to promote downstream processing of bauxite, banning the export of raw ore. The policy aims to stimulate the development of domestic smelters and alumina refineries.
Nevertheless, Indonesia’s contribution to the global alumina and aluminum supply chain remains very modest. The country’s alumina output stands at just 1.3 million tonnes, accounting for approximately 0.92% of the world’s total alumina production of 140 million tonnes.
Meanwhile, according to data from the U.S. Geological Survey (USGS) and Indonesia’s state-owned aluminum company Inalum, Indonesia’s aluminum production stood at approximately 275,000 tonnes, accounting for about 0.38% of the global total of 72 million tonnes.
Exports are affected by the Carbon Border Adjustment Mechanism (CBAM): Industries must adapt to global emissions standards.
The Carbon Border Adjustment Mechanism (CBAM) is an EU policy that imposes a carbon border tax on imports from third countries whose carbon‑emission standards are deemed inconsistent with those of the EU. The CBAM will enter into force in 2026, with aluminum being among the priority sectors subject to the tariff.
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