AI Drives Indonesia's Mineral Downstreaming Toward Sustainability & Global Competitiveness
02 Jan 2025, 09:23 AM
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Artificial intelligence (AI) technology plays a key role in driving the success of Indonesia’s mineral downstreaming policies. Through the integration of AI and big data, Indonesia has developed an innovative geospatial system that optimizes natural resource management while strengthening its position in the global supply chain.Research conducted by Binus University, titled "Analysis of Big Data in Downstreaming Policies: Indonesia's Strategy and Diplomacy in the Face of Global Dynamics," highlights the benefits of AI in supporting economic diplomacy and downstreaming strategies.One of the Binus University research team members, Dr. Alexander A.S. Gunawan, explained that the use of modern technologies like the Peta Hilirisasi platform (petahilirisasi.id) offers deep insights into strategic commodities such as nickel, bauxite, cobalt, and quartz sand.“AI integration allows us to better understand the distribution patterns and socio-economic impacts of mining activities in more detail. This technology not only supports sustainability but also enhances the efficiency of resource management processes,” said Alexander.The Peta Hilirisasi platform, an AI-based geodashboard, assists the government and industry players in identifying mineral potential, mapping resource distribution, and predicting market trends. With data processed over two decades, covering production records, trade (exports-imports), and geospatial information since the early 2000s, the platform provides evidence-based insights that expedite decision-making in downstreaming.In addition to displaying interactive maps and charts, Peta Hilirisasi also features machine-learning-based market trend modeling that can project the potential added value of a commodity in the global market.Indonesia's downstream diplomacy also greatly benefits from AI integration, especially through the in-depth analysis provided by Peta Hilirisasi. This technology helps the government strengthen its arguments in international negotiations, as geospatial data makes it easier for Indonesia to demonstrate its commitment to domestic processing and sustainability—especially amidst challenges such as the European Union’s WTO lawsuit over the nickel export ban.For instance, when presenting the potential reserves of nickel and bauxite at international forums, Indonesia can provide verified distribution maps and supply forecasts. This approach strengthens the government’s negotiation position when setting export-import policies."According to the Binus study, this data-driven diplomatic approach has attracted the attention of other countries, including the Philippines and South Africa, which are now adopting similar steps. Indonesia is setting an example of how technology can bolster economic strategies and national policies in the face of global competition," said Alexander, who is also the Head of the Data Science Program at Binus University.Alexander also noted that the benefits of AI in business decision-making have been widely discussed in international journals. One such example is the research "Artificial Intelligence for the Real World" by Davenport and Ronanki, which emphasizes that AI provides faster and more accurate insights, enabling organizations to leverage data effectively and improve operational efficiency.Another relevant publication is McKinsey's "The State of AI in Early 2024," which projects that over 65% of organizations across various sectors will begin adopting AI to support strategic decision-making. While this is a global trend, several studies have highlighted similar patterns in Indonesia, particularly in the financial and manufacturing sectors. However, despite the widespread discussion about AI’s role in decision-making, research specifically focusing on the downstreaming of raw materials, diplomacy, and the related legal framework remains limited.Despite its clear advantages, AI-based downstreaming also faces challenges. The processing of minerals like nickel requires environmentally friendly technologies to minimize harmful waste. Increased mining exploitation needs to be balanced with strict regulations and sustainable technologies.“By combining AI with strong regulations, we can mitigate environmental risks while ensuring that mineral downstreaming supports inclusive national economic development,” added Alexander.Through a multidisciplinary approach that integrates technology, law, and international business, Indonesia has created a downstreaming policy that adapts to global dynamics. The Binus study states that this success opens up opportunities for Indonesia not only to become a global manufacturing hub but also a leader in technology-driven resource management."With AI as a key driver, Indonesia’s mineral downstreaming now has a stronger foundation to face global challenges, attract foreign investment, and create new jobs. However, the sustainability of this policy still depends on the synergy between technology, stakeholder collaboration, and adherence to environmental regulations," concluded Alexander.
