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The Existence of Smelters in the Era of President Jokowi Increases the Country’s Economy

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By: Rivka Mayangsari*)

In the era of President Joko Widodo (Jokowi)’s administration, Indonesia has shown a great commitment to the development of downstream industries. One of the real steps taken is the construction of smelters or mineral processing plants. The construction of this smelter is not just an infrastructure project, but also part of the government’s long-term strategy to encourage economic growth by optimizing the added value of natural resources (SDA) owned by Indonesia. The existence of smelters in various regions of Indonesia is believed to be able to drive the wheels of the national economy, increase state revenues, and open up many jobs.

One of the smelter projects in the spotlight is the construction of the PT Freeport Indonesia smelter in Gresik, East Java. President Jokowi stated that the investment in the construction of this smelter factory contributed significantly to increasing state revenue, with estimated state revenue from PT Freeport Indonesia reaching around Rp80 trillion. This figure shows the great potential of this sector to boost the national economy. In addition, the construction of this smelter is also claimed to create many jobs for the community and support the downstream program initiated by the government.

Since the beginning, President Jokowi has continued to emphasize the importance of downstreaming natural resources as the key for Indonesia to not only rely on exports of raw materials. Downstreaming allows the country to process natural resources into finished products that have a higher selling value in the international market. Smelters play an important role in this process because they are facilities for processing raw materials such as copper, nickel, and bauxite. With the presence of smelters, Indonesia is expected to no longer only export raw materials, but also finished products, which will contribute greatly to the country’s foreign exchange.

One of the smelters that is also getting attention is the PT Amman Mineral Internasional Tbk Smelter in West Nusa Tenggara (NTB). Minister of SOEs Erick Thohir said that this smelter is one of Indonesia’s efforts through national private companies to increase the value of raw materials. The smelter is considered to help encourage the downstreaming of natural resources in Indonesia. The existence of this smelter is said to not only provide direct benefits in the form of increasing the added value of products, but also open up economic opportunities for the local community, especially in terms of job creation and improving welfare.

Through downstreaming, Indonesia’s rich natural resources are no longer exported in raw form at low prices, but are further processed so that they have a higher selling value. This is certainly in line with the government’s vision to optimize the use of natural resources for the welfare of the people and strengthening the national economy.

Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia revealed that the existence of the smelter has a broad positive impact, both nationally and regionally. The construction of the copper smelter, he said, is not only an effort to improve infrastructure, but a strategic step aimed at increasing the added value of natural resources. According to Bahlil, with the operation of the smelter, the added value of Indonesia’s mineral resources will increase, resulting in greater profits for the national economy.

The existence of smelters in various regions of Indonesia, such as in NTB and East Java, is also considered to support regional economic growth. When the smelter starts operating, not only the national economy benefits, but also the community around the smelter location. The opening of employment opportunities, both directly and indirectly, has a positive impact on the local economy. In addition, infrastructure in the area will also develop along with the construction and operation of the smelter. This is expected to create a domino effect that encourages the growth of other sectors such as services, transportation, and housing.

In recent years, the construction of smelters in various regions of Indonesia has increased the country’s foreign exchange. This is one proof that the natural resource downstreaming strategy initiated by President Jokowi’s government has indeed had a significant positive impact on the national economy. In addition, with the increasing number of smelters being built, Indonesia is expected to shift from being a country that exports raw materials to a country that is able to produce high-value finished products.

Moreover, the construction of the smelter is said to be in line with the government’s efforts to create a more inclusive and sustainable economy. By involving national and foreign companies in this project, Indonesia is considered to have succeeded in creating a mutually beneficial collaboration. In addition to increasing state revenue, the construction of this smelter is also seen as playing a role in preserving the environment through more efficient and environmentally friendly processing of natural resources.

In the future, Indonesia is expected to be stronger in the natural resource processing industry, with more smelters being built across the country. The government has shown its commitment to continue encouraging the downstreaming of natural resources as an important strategy to achieve inclusive, sustainable, and highly competitive economic growth. The existence of these smelters is not only a symbol of the success of infrastructure development, but also an important milestone in Indonesia’s journey towards becoming a strong and independent industrial nation.

Thus, the existence of smelters in the era of President Jokowi is considered to not only improve the country’s economy, but also create new opportunities for the Indonesian people to be more prosperous.

*) Economic observer

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