Jakarta, 10 December 2024 – Mineral downstreaming is a strategic step taken by the Government of Indonesia to provide added value in optimizing the economic benefits of domestic mineral resources and supporting the energy transition towards net-zero emission (NZE). The downstream program has an important role in the management of critical minerals. There are 47 critical minerals as stated in the Minister of Energy and Mineral Resources Decree Number 296.K/MB.01/MEM.B/2023. There are at least 7 minerals that are the focus of current management, namely, nickel, iron, tin, copper, bauxite, gold and silver. This was revealed by Farid Wijaya, Senior Analyst for Materials and Renewable Energy, Institute for Essential Services Reform (IESR) in a workshop organized by the Natural Resource Governance Institute (NRGI) and ViriyaENB on Tuesday (10/12/2024).
“Nickel is highlighted for its role in the battery value chain, while aluminum and copper have important functions in renewable energy technology infrastructure, including solar power plants (PLTS), wind power plants (PLTB) and hydrogen and nuclear technologies. Through downstreaming, Indonesia can reduce dependence on imports of clean energy components, create jobs, provide and turn the wheels of economic activity, and improve the quality of manufacturing and national industrial capacity,” said Farid.
According to Farid, the mineral downstreaming process also has a direct impact on increasing domestic added value. Instead of exporting raw ore at low prices, Indonesia can export higher value-added products, such as ingots, foils, solar cell components or battery modules. Thus, domestic economic activity increases, broadens the tax base, and increases state revenue. Downstreaming also opens up investment opportunities, both domestic and foreign, to build high-tech processing and manufacturing industries.
“In line with increasing reserve resilience and optimizing added value, Indonesia has the potential to become a technology center and producer of renewable energy technology, batteries, and electric vehicles. This contributes to increasing the Domestic Component Level (TKDN), creating a strong industrial ecosystem, and enhancing national independence in the provision of clean energy. By utilizing mineral resources wisely, the country can embrace a cleaner and more sustainable future,” Farid said.
Ultimately, mineral downstreaming is not just a matter of economics, but also a strategic step to lead Indonesia towards NZE and realize the vision of a Golden Indonesia 2045. By combining the wealth of mineral resources with visionary industrial policies, Indonesia can create added value, increase state revenue contributions, and realize energy independence that has a positive impact on future generations.