Indonesia to Build Permanent Magnet Factory from Rare Earth Elements

Chief Technology Officer (CTO) of Danantara Sigit Puji Santosa has revealed that Indonesia will build a permanent magnet plant from rare earth elements (LTJ), with construction to commence in the near future.

“God willing, by 2028, permanent magnets will be available in Indonesia and so forth. This is one integrated unit that we are building all the way to transportation vehicles,” Sigit said during the MINDialogue event themed “Commodities for the Nation: Strategy for Strengthening Mineral Reserves for Indonesia’s Economic Stability and Sovereignty” held in Jakarta on Wednesday.

Permanent magnets are a downstream product of rare earth elements using NdFeB (Neodymium-Iron-Boron) as raw material.

Sigit explained that neodymium (Nd) is the raw material for permanent magnets used in traction motors for electric vehicles (EVs). A traction motor is an electric motor used to propel vehicles.

“In permanent magnets, there will be traction motors all the way to the motors and EV cars themselves. So, we are looking at this holistically from upstream to downstream,” Sigit said.

Beyond the electric vehicle industry, Sigit noted that rare earth element downstream processing also extends to the defence sector. The potential for rare earth element development in defence, he said, lies in armour steel.

“Together with our colleagues at Krakatau Steel, we are considering and have already been able to enter the armour steel segment. However, we must refine this further, and as for materials for semiconductors, radar, sensors, and so on, we are preparing everything,” Sigit said.

In developing the mineral industry specifically for processing rare earth elements, Sigit said Danantara is partnering with the Ministry of Energy and Mineral Resources (ESDM) and the Ministry of Higher Education, Science, and Technology (Kemendikti Saintek).

Additionally, Danantara has established PT Perusahaan Mineral Nasional (Perminas), which will manage rare earth elements. He expressed hope that Indonesia will not only develop extractive industries related to rare earth elements.

“Refineries are what we will pursue. Thank God we have secured outstanding partners and we will soon develop this together with colleagues at BRIN and colleagues at universities,” Sigit said.