Jakarta, CNBC Indonesia \u2014 Indonesia should not be satisfied with its\nmining downstreaming programme alone, the National Economic Council\n(DEN) says. The country needs to build an integrated industrial\necosystem, from factories producing supporting raw materials to the\nmanufacture of finished products that consumers can use\ndomestically.<\/p>\n
DEN Executive Director Tubagus Nugraha said the government should now\nconsider industries that support processing and refining. This is\nparticularly important as global geopolitical tensions have risen since\nthe start of the year, driving up prices for several commodities,\nincluding sulphur, a raw material used in Indonesia\u2019s nickel\ndownstreaming industry.<\/p>\n
With numerous nickel smelters producing battery materials, including\nHigh Pressure Acid Leaching (HPAL) facilities that require large\nquantities of sulphur, reliable sulphur supplies are crucial to the\nnickel-processing industry.<\/p>\n
\u201cBuild an ecosystem in which supporting-material industries can\ndevelop. Sulphuric acid could be an initial focus in the copper\nindustry. Why? Copper production generates sulphuric acid as a\nby-product, which can be used to connect the different parts of the\necosystem in North Kalimantan \u2026 We will put this ecosystem in order and\nstrengthen its supporting industries,\u201d he said at CNBC Indonesia\u2019s\nCoffee Morning event, titled \u201cDownstreaming Advances, Mining Industry\nGrows Stronger?\u201d, according to a report published on Thursday (29\nOctober 2026).<\/p>\n
He said Indonesia\u2019s mineral downstreaming exports could reach US$50\nbillion by the end of 2026, comprising US$32 billion from nickel, US$7\nbillion from bauxite and aluminium, and US$3 billion from battery\nmaterials.<\/p>\n
\u201cEven though we do not have lithium, we produce lithium hydroxide and\nlithium carbonate,\u201d he said.<\/p>\n
\u201cBuild further capacity and build the ecosystem. Supporting\nindustries and raw materials are the next step. Exporters are now asking\nwhether we can produce sulphur and sulphuric acid domestically,\u201d he\nsaid.<\/p>\n
\u201cThe challenge is to define downstreaming in terms of what we\nprocess, but when we talk about industrialisation, we must ask who will\nuse the products. That means creating demand. We need to consider how\nthis can be developed, including data centres,\u201d he said.<\/p>\n
\u201cThere is a long chain of interrelationships: the longer the value\nchain, the greater the benefits,\u201d he added.<\/p>\n
Dependence on imported sulphur is already threatening the continuity\nof Indonesia\u2019s nickel downstreaming industry. Disruptions to global\nsupply chains, particularly in the Middle East, could affect the\noperations of hydrometallurgical nickel-processing plants.<\/p>\n
Arif Perdana Kusumah, chairman of the Indonesian Nickel Industry\nForum (FINI), previously said that around 75\u201380% of Indonesia\u2019s sulphur\nimports in 2025 came from the Middle East. Of total imports of\napproximately 5.3 million tonnes, the largest share was supplied by\ncountries in the region.<\/p>\n
\u201cThis highly concentrated supply, following the closure of the Strait\nof Hormuz, has disrupted \u2014 and could cut off \u2014 a primary source of raw\nmaterials for HPAL refineries in Indonesia,\u201d he told CNBC Indonesia on\nThursday (23 April 2026).<\/p>\n
Arif said sulphur is critical to nickel downstreaming, particularly\nin the production of sulphuric acid used in the leaching process at High\nPressure Acid Leaching (HPAL) facilities.<\/p>\n
\u201cProducing battery-grade nickel in the form of Mixed Hydroxide\nPrecipitate (MHP) using HPAL technology is highly dependent on sulphuric\nacid,\u201d he said.<\/p>\n
The industry requires around 10\u201312 tonnes of sulphur to produce one\ntonne of nickel in MHP form, making sulphur one of the largest cost\ncomponents in HPAL production.<\/p>\n
\u201cAs the world\u2019s largest producer of nickel-cobalt material (MHP) from\nHPAL projects, Indonesia is highly dependent on sulphur imports from the\nMiddle East,\u201d he said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/mining-downstreaming-alone-is-not-enough-indonesia-must-build-an-industrial-ecosystem-1793271073", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }