United States Targets Indonesia's Critical Minerals, Potential for Non-Chinese Refinery Plant Control
JAKARTA — An agreement between Indonesia and the United States under the Agreement on Reciprocal Trade (ART), particularly in the critical minerals sector, is assessed as having the potential to increase investment in the construction of domestic refining plants (smelters). Previously, the Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia confirmed that this cooperation is not merely a trade agreement, but rather part of a strategy to ensure that the nation’s critical mineral wealth is not exported in raw form. The Government is committed to ensuring that every investment opportunity arising from the ART must result in downstream development and value creation within the country.
The Minister emphasised the importance of equal treatment and maintaining legal certainty for existing investors to create a healthy investment climate. “Indonesia’s nickel downstream processing industrial ecosystem has undergone a lengthy process, substantial investment, and determined effort, establishing Indonesia as the world’s largest nickel producer,” he stated. Similarly, Julian Ambassadur Shiddiq, Deputy of System and Governance at the Mineral Industry Authority (BIM), noted that the entry of the United States opens opportunities for market diversification and potential technology transfer, given that Indonesia has not yet fully mastered smelter technology. “This represents significant investment potential, but we continue to prioritise domestic needs and the downstream processing must be conducted in Indonesia,” he said. The BIM will serve as an enabler and accelerator in developing a rare earth metal industrial ecosystem from upstream to downstream.
Meanwhile, Rizal Kasli, Chairman of the Mining Professional Body of the Indonesian Engineers Association (PII), stated that investment opportunities for critical mineral downstream processing, including rare earth elements (REE), are substantial given the increasing demand from advanced industries. According to him, the United States has an interest in securing critical mineral supplies, as the global supply chain has historically been dominated by China.