Downstream Investments Reach IDR 431.4 Trillion After Export Ban Reinforcement
Thu 20 Nov 2025, 15:53 PM
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The Government of the Republic of Indonesia recorded downstream investment realization of IDR 431.4 trillion from January to September 2025. This marks a 58.1 percent increase compared to the same period last year.
This surge followed the tightening of government policy that no longer permits the export of raw materials. The government also requires processing to be carried out domestically.
Deputy Minister of Investment and Downstreaming, Todotua Pasaribu, explained that downstreaming has become the main foundation of Indonesia’s economic transformation.
“We have adopted a policy that no longer allows natural resources to be exported in raw form. At the very least, the first-tier process must be done domestically,” he said at the Antara Business Forum in Jakarta, Wednesday, November 19, 2025.
Todotua noted that downstreaming has become a national policy framework strategically designed by the Ministry of Investment and Downstreaming.
The government has created a roadmap covering 28 priority commodities in eight major groups, aiming to attract export-oriented investment and create greater added value for the national economy.
Todotua said the increase in realized investment reaching IDR 431.4 trillion was driven primarily by the mineral sector, followed by plantations and forestry, oil and gas, and fisheries.
This achievement signals a structural shift in Indonesia’s investment composition. “Last year, the total was only around IDR 42.9 trillion. This year’s increase proves that downstreaming has a direct impact on boosting national investment,” he said.
Todotua discussed how Indonesia’s wealth of natural resources is a major asset that many countries do not possess.
With a population of more than 280 million and a geopolitical position along the backbone of global trade routes, he believes Indonesia has a strategic opportunity to accelerate industrialization.
“Indonesia is extraordinary. What the world needs is here. We sit on the east–west and north–south geopolitical backbone, with ALKI II as a driver of the international economy,” he said.
The nickel sector is also one of the industrial chains whose downstream structure is nearly complete, from smelters to the battery industry.
The government is now organizing the downstreaming of bauxite, copper, and tin so that the domestic supply chain becomes stronger and less dependent on external markets.
Todotua also cautioned that uncontrolled smelter development carries the risk of creating overcapacity and eroding product competitiveness in the long term.
In the energy sector, the government is accelerating coal gasification projects. Todotua said the coal-to-synthetic-gas project being carried out by Bukit Asam with PDN and Pusri will be directed toward ammonia and methanol production, while also reducing currently high import levels.
“Our methanol imports are still 2.2 to 3 million tons, even though we have gas and coal. Demand is rising because the B40 program requires methanol to be blended with CPO. We need to catch up with countries like China, where 40 percent of coal is used for derivative products,” he said.
The acceleration of downstreaming is also evident in the ecosystem being developed by MIND ID. In the aluminum sector, Phase 1 of the Smelter Grade Alumina Refinery (SGAR) has officially begun operations.
Going forward, the facility in Mempawah will be further strengthened by SGAR Phase II and a new Aluminum Smelter currently under construction. These steps are expected to meet domestic alumina needs and reduce import dependence.
In the tin sector, PT Timah is finalizing downstream products ranging from solder to tin chemicals to enter the global electronics, automotive, and chemical markets.
Meanwhile, PT Vale Indonesia continues to expand investment to strengthen production of nickel matte and low-carbon derivative products as part of the electric-vehicle battery ecosystem through three strategic projects: the Indonesia Growth Project (IGP) in Pomalaa, Morowali, and Sorowako. These projects are key milestones for expanding nickel capacity while laying the foundation for Indonesia’s EV industrial ecosystem.
At the same time, PT Freeport Indonesia is preparing to enhance copper downstreaming via the Gresik Smelter and Precious Metals Refinery (PMR), which form a vital foundation for the electricity, renewable energy, and global technology industries.
Todotua said MIND ID’s downstream projects are the backbone of the government’s efforts to build a comprehensive supply chain for strategic minerals from upstream to downstream.
The government estimates that downstreaming will deliver economic impacts through 2040, with investment reaching USD 618 billion and added value of USD 235.9 billion, along with cumulative export potential of USD 857 billion and the creation of more than three million jobs.
“Downstreaming is the strategy to ensure Indonesia is no longer positioned as a raw-material exporter, but becomes a key player in global value chains,” Todotua said.
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