Bauxite Overtakes Nickel as Top Contributor to Downstream Investment

There has been an interesting shift in Indonesia’s downstream investment map in the second quarter of 2026. If nickel had previously been the sector with the largest investment, that position has now been taken over by bauxite. Minister for Investment and Downstreaming/Head of BKPM Rosan Roeslani said the shift occurred alongside the increasing construction of bauxite downstream projects, by both domestic and foreign investors. “If we look at it, nickel is usually always number one. Now there is a shifting, bauxite is number one. We usually know it is always nickel, now there is a shifting to bauxite,” Rosan said. According to him, the increase in investment in the bauxite sector was triggered by the construction of a number of processing projects that are beginning to enter the realisation phase. Nevertheless, Rosan stressed that the government still wants to expand downstreaming to various other commodities so that it does not only depend on minerals. Rosan said the government is now pushing for the downstreaming of commodities such as palm oil, rubber, timber, silica sand, and the fisheries sector. According to him, Indonesia has successfully built a relatively complete nickel downstream ecosystem, from nickel ore to the production of electric vehicle batteries. “We already have the whole ecosystem. That is also what we want to implement for bauxite as well, derivatives of palm oil and rubber, timber, silica sand and others,” Rosan said. Previously, the Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) recorded investment realisation throughout the first half of 2026 reaching Rp 1,010.6 trillion. This figure is equivalent to 49.5% of this year’s national investment target of Rp 2,041.3 trillion. “The overall total target in 2026 is Rp 2,041.3 trillion and in the first semester, or from January to June 2026, the expenditure achieved by investors in Indonesia reached Rp 1,010.6 trillion, an increase of 7.2% year on year. And this target is in accordance with our target of 49.5% of the total target in one year,” said Minister for Investment and Downstreaming Rosan Roeslani. He said this achievement was made amidst global uncertainty due to geopolitical and geoeconomic challenges. Despite this, investor interest in investing in Indonesia remains maintained and in line with the targets set by the government. “Amidst ongoing global geopolitical and geoeconomic challenges, thank God I can convey here, the commitment of investors to invest directly in Indonesia or foreign direct investment is still inline with the target proclaimed, which was set up by Bappenas for us in 2026,” he said. On an annual basis, investment realisation in January-June 2026 grew 7.2% compared to the same period last year. Rosan is optimistic that the 2026 investment target can be achieved by maintaining the investment trend in the second semester. In addition to recording growth in investment value, the realisation of investment in the first half of 2026 also had an impact on job creation. Rosan said the incoming investment managed to absorb 1,448,862 workers. This number increased by around 15% compared to the same period the previous year. In terms of investment sources, the contribution of foreign direct investment (PMA) and domestic direct investment (PMDN) was recorded as almost balanced. PMDN reached Rp 502.9 trillion or 49.8% of total investment, while PMA was Rp 507.6 trillion.