By: Arga Pratama
The government has positioned downstreaming as the primary strategy to accelerate Indonesia’s national economic transformation. This policy is not merely about shifting from exporting raw materials to producing value-added goods; it is designed as a foundation for strengthening the industrial structure and enhancing Indonesia’s global competitiveness.
This commitment was reaffirmed by President Prabowo Subianto when presenting 18 downstream projects to United States business leaders at a forum hosted by the US Chamber of Commerce in Washington, D.C. The President emphasized that accelerating the development of processing industries is crucial to ensuring Indonesia no longer relies heavily on raw commodity exports.
According to the President, these projects form part of a broader strategy to increase the added value of natural resources, expand employment opportunities, and reinforce the foundation of national industry. The government has also prepared a waste-to-energy processing project worth USD 3 billion as part of integrating downstreaming efforts with energy security and environmental management agendas.
To support financing and accelerate implementation, the government relies on the role of Danantara Indonesia’s Investment Management Agency as the investment engine. The President believes that strengthening processing industries will be key to enabling Indonesia to move up the global supply chain, while also attracting international companies to establish Indonesia as a strategic production base in the region.
The acceleration of downstreaming is further supported by the development of enabling infrastructure, including ports, airports, and toll roads. These measures are aimed at ensuring logistical efficiency so that processing industries can grow with competitive costs and smooth distribution channels.
In the energy and mineral sectors, Minister of Energy and Mineral Resources Bahlil Lahadalia explained that the government continues to develop an integrated electric vehicle battery industry ecosystem. The production chain encompasses nickel mining, smelters, High-Pressure Acid Leach (HPAL) facilities, precursor and cathode production, and battery cell manufacturing.
The total investment value of these projects is estimated at USD 7 to 8 billion. The initial phase facility, with a capacity of 10 gigawatts, has been operational since 2023 and will be expanded by an additional 20 gigawatts. The government views this development as a strategic step to strengthen Indonesia’s position in the global battery and electric vehicle supply chain.
Bahlil stressed that downstreaming must deliver maximum added value to the national economy. He believes that the battery ecosystem not only increases the value of mineral resources but also drives regional economic growth and enhances energy resilience. The supply of nickel raw materials will be supported by PT Aneka Tambang Tbk, with the majority ownership targeted to remain under state control in accordance with constitutional mandates.
The role of state-owned enterprises (SOEs) in accelerating downstreaming is also evident through MIND ID as the mining industry holding company. Throughout 2025, investment realization in the downstream sector reached Rp584.1 trillion, or approximately 30.2 percent of the total national investment of Rp1,931.2 trillion. This achievement demonstrates that downstreaming has become a primary driver of investment growth.
MIND ID continues to strengthen the development of mineral processing and refining facilities for commodities such as bauxite, copper, and nickel. At the same time, institutional and public relations functions are reinforced to maintain public trust and ensure sustained support for strategic projects.
Head of Institutional Relations at MIND ID, Selly Adriatika, views strategic communication as a critical element in the success of downstreaming. Under her leadership, public relations functions have evolved beyond supportive roles to actively building public understanding, managing issues proactively, and strengthening collaboration with stakeholders.
Through integrated communication approaches and public literacy programs such as Junior Mining Fun Fest, MIND ID seeks to instill early awareness of the importance of downstreaming for the future of national industry. These efforts complement operational strengthening, ensuring that industrial transformation proceeds not only technically but also with strong social legitimacy.
Moreover, the government’s consistent policy in maintaining regulatory certainty and a conducive investment climate remains a decisive factor in the success of downstreaming. Synchronization among ministries, agencies, and regional governments accelerates licensing processes, strengthens governance, and minimizes implementation barriers in the field. This integrated approach reflects the state’s seriousness in ensuring that strategic projects are executed on time and on target.
Downstreaming also strengthens the domestic economic structure by increasing the manufacturing sector’s contribution to gross domestic product. As more processing and refining facilities become operational, the industrial value chain extends further within the country. This condition generates multiplier effects across supporting sectors such as logistics, construction, engineering services, and human resource development.
Overall, the acceleration of downstreaming demonstrates a development trajectory that is increasingly structured and long-term oriented. With consistent policy support, massive investment, and synergy between SOEs and the private sector, downstreaming serves as a strategic instrument to realize inclusive, resilient, and sustainable national economic growth.
Looking ahead, the sustainability of this agenda will reinforce industrial independence, expand quality employment opportunities, and ensure that the benefits of Indonesia’s natural resources are equitably distributed across all segments of society.
National Industrialization Strategy Analyst