Indonesia-US Trade Agreement: Mandatory Processing, Raw Material Exports Remain Banned

JAKARTA — The Indonesian government has clarified that the Indonesia–United States (US) trade agreement under the Agreement on Reciprocal Trade (ART) scheme does not alter the fundamental principle of mandatory national mineral processing. Access for US investors to critical minerals, including rare earth elements, remains restricted by requirements for domestic investment and processing.

Deputy Minister of Investment and Industrial Development/Deputy Head of BKPM, Todotua Pasaribu, has confirmed that granting access to American business operators does not create room for raw material exports.

“Essentially, the US request for American business operators to be given access to our mineral sectors, including rare earth, is not a problem,” said Todotua in Jakarta on Thursday (26 February 2026).

Todotua emphasised that the prohibition on raw material exports remains in force under Indonesia’s legal framework. Every foreign company wishing to manage strategic minerals is required to build processing facilities (smelters) within Indonesia.

“As long as this follows the regulation that if they want to enter, they must invest in processing. Because our country’s law does not permit our raw materials to leave the country,” he asserted.

The principle of equal trade also applies to all other global partners, including Europe and Asian countries. Moreover, the government positions mineral processing as the foundation for pursuing a target investment realisation of Rp 13 trillion over the next five years.

“We are ready, they request access to enter, okay that’s allowed. As long as they make investments in processing, we grant access. It’s equal trade,” added Todotua.

“We already have a large investment plan. There is an investment target figure that we must achieve each year. There are priority sectors that we push, especially regarding the downstream concept,” he continued.

In line with this, Energy and Mineral Resources Minister Bahlil Lahadalia previously also confirmed that strategic commodities such as nickel and rare earth elements are indeed open to US investors, but remain subject to strict domestic regulatory oversight.

“We must still respect the regulations that apply within our country, but we will also provide priority to support and facilitate implementation,” explained Bahlil.

Bahlil emphasised that this openness to investment should not be misinterpreted as a relaxation of policy. The government’s focus remains on strengthening domestic value chains.

“So don’t interpret this as us opening up raw material exports, no. What is meant is that after refining, the results can then be exported,” said Bahlil.