Downstreaming Is Key for Indonesia to Optimise Its Natural Resources

Jakarta, CNBC Indonesia - Assistant Deputy for Mineral and Coal Development at the Coordinating Ministry for Economic Affairs, Herry Permana, stressed that downstreaming could be the key to optimising Indonesia’s limited natural resources. He said Indonesia must move quickly, because there is no other option but downstreaming.

“For natural resources to be optimised, for example coal, there must be downstreaming; otherwise we simply sell raw goods,” he said during the CNBC Indonesia Mining Forum 2026, on Friday 6 March 2026.

He acknowledged that building it would take time, but it must be done if value-added is to be realised.

Herry cited the downstreaming of bauxite-aluminium undertaken by MIND ID through Inalum and Antam in Mempawah, West Kalimantan. As information, the bauxite-alumina downstream project began in February 2026, namely Smelter Grade Alumina Refinery (SGAR) Phase 2 and the second aluminium smelter of PT Inalum.

The total investment for this integrated project, including SGAR Phase 1 which is already operational, SGAR Phase 2, Inalum’s second aluminium smelter, and the power plant in Mempawah, West Kalimantan, is expected to reach Rp 104.5 trillion.

“In other words, because our aluminium is highly integrated to reduce imports, for the industry to grow domestically it is not easy but we must do it,” said Herry.

He emphasised that if downstreaming is not carried out now, in this period of broadly encouraging global conditions, Indonesia could miss opportunities. This condition could also become the government’s lever to move faster to promote downstreaming.