Downstreaming Deemed to Strengthen Indonesia's Position in Global Supply Chain

Investment and Downstreaming Minister/Head of BKPM and Chief Executive Officer of Danantara Indonesia, Rosan Roeslani, has revealed that downstreaming projects are strengthening Indonesia’s position in the global supply chain. He stated that the downstreaming project developed by Vale demonstrates that natural resource-based industrial development can generate higher added value while reinforcing Indonesia’s position in the global supply chain. “Vale’s downstreaming project sets a new standard in international collaboration aligned with national interests, namely building resource sovereignty, creating jobs, and generating high added value that supports the Net Zero Emissions agenda,” Rosan said in a statement in Jakarta, quoted from Antara, Sunday, 26 July 2026. According to him, the development of downstreaming-based industrial estates is also part of the strategy to build a national electric vehicle ecosystem capable of creating jobs, strengthening industrial independence, and supporting energy transition targets. The economic impact of the project is also expected to be increasingly felt in nickel-producing regions, particularly Central Sulawesi. Besides encouraging industrial growth, the development of industrial estates is considered capable of expanding business opportunities for micro, small, and medium enterprises (MSMEs) and increasing the economic activity of surrounding communities. Strengthening the national electric vehicle industry supply chain is increasingly seen as dependent on accelerating nickel downstreaming through the construction of high-tech processing facilities. This step not only increases the added value of minerals domestically but also expands investment, creates jobs, and drives regional economies. One development considered a marker of downstreaming acceleration is the progress of the Sambalagi High Pressure Acid Leaching (HPAL) facility owned by PT Vale Indonesia, a member of the Indonesia Mining Industry Holding MIND ID, in Morowali, Central Sulawesi. The project, part of the Indonesia Growth Project (IGP) Morowali with an investment value of approximately USD 2 billion, has entered a critical stage following the arrival of the main autoclave components. The facility, built in three production lines, is targeted to achieve first mechanical completion by the end of 2026. Mining and energy analyst Ferdy Hasiman assessed that the construction of HPAL facilities has become a strategic necessity for the nickel industry amid increasing global demand for electric vehicle battery raw materials. According to him, companies capable of developing mineral processing facilities will have higher competitiveness compared to companies still relying on raw material exports or low-value-added products. “Most of the capital expenditure of mining companies is currently directed towards HPAL construction because these facilities will become the backbone of the electric vehicle ecosystem. So far, MIND ID through Vale is among the most aggressive in developing this project,” he said. He added that the government, together with Danantara Indonesia, is also continuing to accelerate the downstreaming agenda through investment support in strategic projects. According to him, investment consistency is a key factor in maintaining Indonesia’s competitiveness amidst global competition in the battery and electric vehicle industry. “Some private nickel companies have not been too aggressive in the last two years, possibly influenced by regulatory dynamics. Therefore, the sustainability of downstreaming projects is important to maintain investment momentum,” he said. Besides strengthening the mineral processing industry, downstreaming projects are also considered to have a broader economic impact through increased business activity in the regions, job absorption, and the growth of local supply chains involving domestic businesses.