US Investor Permitted to Develop Indonesia's Critical Minerals, Is Downstream Processing Secure?
The Indonesian Government has opened access for United States investors to invest in the critical minerals and rare earth metals sector, including rare earth elements. This step is enshrined in the Agreement on Reciprocal Trade (ART), though it is assured that it will not disrupt the ongoing downstream processing programme.
Vice Minister of Investment and Downstream Processing, Todotua Pasaribu, explained that granting access to US business actors in the strategic minerals sector is standard in commerce, provided they adhere to national downstream processing regulations. He conveyed this at the BKPM Office in Jakarta on Thursday, 26 February 2026.
“Those discussions have already taken place. The essence is that the US request to provide its business actors access to our minerals sectors, one of which is rare earth, presents no problem, and we likely do the same with all countries,” he said.
The ART documentation, in Article 6.1 and Annex III Article 6.1, stipulates that Indonesia must facilitate US investment related to critical minerals, from exploration, mining, extraction, processing, to export. This regulation also guarantees equal or no less favourable treatment for US investors compared with domestic investors (national treatment).
Todotua Pasaribu emphasised that granting this access does not loosen sovereignty over raw materials. He added that legislation continues to prohibit the export of raw minerals.
“As long as this is conducted under the rule that if they wish to enter, they must invest. In the process, because our country by law does not permit raw materials to leave, there is a process, there is investment, [then] they are permitted to enter. That is simply normal business-to-business practice,” Todotua explained.
As compensation, the ART mandates a reciprocal scheme. The US Government is encouraged to facilitate investment financing in Indonesia’s critical sectors through its financial institutions, such as the Export-Import Bank of the United States (EXIM Bank) and the US International Development Finance Corporation (DFC), in collaboration with the US private sector.
Additionally, Indonesia is mandated to facilitate investment in the development of new facilities (greenfield investment) that create employment opportunities in the United States, in accordance with Annex III documentation.