Indonesia Develops Rare Earth Elements Industry; List of Countries Holding the Technology Revealed

Jakarta, CNBC Indonesia - The Indonesia Mining Institute (IMI) has highlighted the challenges faced by Indonesia in mastering Rare Earth Elements (REE) processing technology. Although the government has begun developing REE, Indonesia’s current position is considered far behind several countries that already possess large-scale economic processing technologies.

Chairman of the IMI, Irwasting Arif, explained that the development of the domestic REE industry is still in its very early stages. He outlined several countries that are now major global players in mastering strategic mineral refining technology, ranging from China and India to neighbouring Malaysia.

“When we talk about rare earth elements in Indonesia, we actually have no prior experience. We are still in the early stages,” Irwandy explained during the Mineral Industry Agency (BIM) Webinar: Prospects and the Future of Indonesia’s Rare Earth Metal Minerals, as quoted on Monday (18/5/2026).

Irwandy stated that the dominance of REE processing technology is currently held by China. The nation not only controls the mining aspect but also monopolises almost the entire global separation and refining process through companies such as Shenghe Resources Group and China Northern Rare Earth.

“68% to 70% of the world’s rare earth mine production comes from China. More precisely, over 90%—approximately 91%—of the global refining and separation processes are also controlled by them. The Middle East has oil, but China has rare earth elements,” Irwandy noted.

In addition to China, India possesses processing facilities through Indian Rare Earths using caustic cracking technology. Within Southeast Asia, Malaysia has advanced further as a global REE processing hub through the operation of a plant owned by the Australian company, Lynas Corporation, in Pahang.

“Lynas Corporation, which is from Australia, has a factory in Malaysia. This was one of the initiatives attempted for cooperation with Timah, but it has not yet succeeded. We can see this located in Pahang, Malaysia,” he explained.

Other countries with mature technological roadmaps include Canada, through Medallion Resources, which has entered the pre-commercial stage, and Australia, via Hastings Technology Metals, which is currently preparing for construction. Meanwhile, Indonesia currently only possesses rudimentary processing at a laboratory scale and several small-scale pilot plants.

“Up to this point, Indonesia does not yet possess rare earth processing or refining technology that reaches an economic scale. There are some attempts at the laboratory scale, and some have reached the pilot scale, for example, in Tanjung Ular, Bangka,” said Irvandy.

To date, the primary challenge for Indonesia remains its very limited processing and refining facilities. Through the Mineral Industry Agency (BIM) and PT Perminas, the government is currently being instructed by the President to accelerate research into technology mastery so that the economic value of REE can be realised by the state.

“The economic value of minerals cannot yet be maximised because we do not have adequate downstream technology. This is the main challenge. However, alongside the main challenge, there is a strategic opportunity: the mastery of REE processing technology, the research for which is being conducted by BIM under a mandate from the President,” he concluded.