Indonesia industrial downstreaming strategy

Indonesia is pursuing a national strategy to transform its mining sector from a raw commodity exporter into an integrated industrial powerhouse. This downstreaming initiative aims to bolster economic sovereignty and integrate the nation into global supply chains by processing natural resources into high-value products.

To achieve this, the government is developing a roadmap for 28 strategic commodities through 2045, with a potential investment value of US$618 billion. Plans include narrowing focus to 15 key commodities within the National Medium-Term Development Plan (RPJM) to optimize the oil and gas, minerals, marine, and plantation sectors. Vice Minister of Investment and Downstreaming Todotua Pasaribu noted that the government is preparing three investment strategies: planning, execution, and licensing/incentive policies.

Key objectives include achieving aluminum self-sufficiency by 2030 and expanding copper refining. MIND ID, which holds majority ownership in PT Freeport Indonesia (PTFI), is central to this transition. PTFI is expanding its value chain via the Precious Metal Refinery in Gresik, East Java, which processes anode slime into gold and silver with an annual capacity of approximately 50 tons of gold and 200 tons of silver.

Efforts also focus on addressing revenue leakage and improving regional GDP contributions. Discussions have highlighted the mission of PT Danantara Sumber Daya Indonesia (DSI) to close gaps in state wealth management, particularly in resource-rich regions like South Sumatra where mining contributions remain disproportionately low relative to extracted resource values.