Indonesia’s Bauxite Downstreaming Gathers Momentum in West Kalimantan, Groundbreaking Planned for ...
23 Jan 2026, 11:58 AM
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The government will commence initial inaugurations, or groundbreakings, for six strategic downstreaming projects at the end of January 2026. This move marks an acceleration of the national industrial transformation agenda while strengthening the foundation of a value-added, resource-based economy.Minister of State Secretary Prasetyo Hadi said the six projects are ready to enter the initial construction phase as part of efforts to stimulate the real sector and the fundamentals of the national economy.“At the end of this month, there will be roughly six downstreaming projects slated for groundbreaking,” Prasetyo said at the Presidential Palace Complex, Jakarta, Thursday (Jan 22).Prasetyo emphasized that West Kalimantan has been designated as one of the provinces hosting these downstreaming projects.In addition to the first six projects, the government is also preparing around 12 follow-on downstreaming projects targeted for inauguration starting in February 2026.“West Kalimantan is one of them. So there are six projects. Please pray that the remaining roughly 12 can proceed in February. By March at the latest, we aim to have all of them underway,” Prasetyo said.The groundbreaking plan aligns with the agenda of Indonesia’s Daya Anagata Nusantara Investment Management Agency (Danantara), which previously stated it was ready to commence several downstreaming projects in February 2026.Danantara Indonesia CEO Rosan Roeslani said the projects include bauxite and aluminum downstreaming, a bio-avtur facility, an oil refinery, and even poultry-farming projects at five locations.“These include bauxite and aluminum in Balikpapan, then bio-avtur, a refinery, and poultry farming in five places,” Rosan said after the “Semangat Awal Tahun 2026” event in Jakarta, Wednesday (Jan 14).Additionally, a coal-to-dimethyl ether (DME) gasification project may also break ground in February 2026, pending final readiness.This downstreaming push also has the attention of President Prabowo Subianto. On January 11, 2026, the President chaired a limited meeting at his residence in Hambalang, Bogor Regency, West Java, to discuss strengthening national industrial transformation, including bauxite downstreaming.Cabinet Secretary Teddy Indra Wijaya said the meeting reviewed the readiness of several strategic projects that will soon enter the groundbreaking phase.“The limited meeting discussed the readiness of several downstreaming projects that will soon begin groundbreaking,” Teddy said in an official statement.The government is targeting six new downstreaming projects with a total investment of about USD 6 billion to begin construction in early February 2026.One of the flagship projects is the development of an alumina smelter and a smelter-grade alumina (SGA) facility based on bauxite in Mempawah, West Kalimantan.West Kalimantan is seen as strategically positioned for this agenda. According to Indonesia Mining and Energy Watch (ISEW), Indonesia’s bauxite reserves are estimated at 7.78 billion tons. However, selling bauxite as raw ore has so far been deemed suboptimal for the economy.ISEW Executive Director Ferdy Hasiman explained that if all bauxite reserves were sold as raw ore at an assumed price of USD 40 per metric ton, the economic value would be only about USD 311.2 billion. That value rises significantly when bauxite is processed into alumina and aluminum.“Three tons of bauxite can produce one ton of alumina. Assuming a price of USD 400 per metric ton, the potential economic value rises to around USD 1.037 trillion,” Ferdy said.At the next stage, two tons of alumina can produce one ton of aluminum, with an economic value reaching USD 3.885 trillion, or about IDR 65,145 trillion.One flagship project currently being advanced by the government is the integrated bauxite mining and processing facility in Mempawah managed by PT Borneo Alumina Indonesia (BAI), an initiative of the MIND ID Group through PT Aneka Tambang Tbk and PT Indonesia Asahan Aluminium.Beyond the domestic focus, the downstreaming agenda is also attracting international attention. Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that Danantara has held talks with the United States regarding access to critical minerals, including bauxite.“There have been discussions between Danantara and the U.S. export agency, as well as several U.S. companies that have communicated with critical-mineral companies in Indonesia,” Airlangga said.According to him, the cooperation is business-to-business and reflects rising global interest in Indonesia’s critical minerals, which are needed by the automotive, aviation, and defense sectors.
