Thursday, April 14, 2022

Indonesia Wants To Take Mining Industry To Next Level


To boost its Economy, Indonesia wants to move away from Exporting Raw Materials, to focus instead on developing its Downstream Industries.

Downstream Activities involve Processing Raw Materials into Finished Products to provide added value. For instance, Crude Oil can be refined into Petroleum, Diesel, and Plastics.

Indonesia hopes to transform Raw Nickel into higher End Products like, Lithium Batteries for Electric Cars, a move the Country's Investment Board said will eventually bring Economic Growth.

Indonesia is looking to revitalize its Resource sector. President Jokowi Widodo, has vowed to boost the Resource Sector's contribution to National GDP by increasing Downstream Activities.

Indonesia may be rich in Mineral Resources, but its Mining Sector contributes only a fraction to the Country's Economy.

The Southeast Asian Nation, has Natural Deposits including: Cobalt, Bauxite, Nickel, and Tin, some of which are important Raw Materials for Electric Vehicle production.

Despite large Exports, the Mineral and Coal sector alone, contributed only 5% to Indonesia's GDP in 2019, according to the Extractive Industries Transparency Initiatives.

Downstream Activities to provide added Value like: Crude Oil can be refined into Diesel, Petroleum, and Plastics.

President Jokowi Widodo has said: "Indonesia always exports raw materials, while it is better to process and consume them through downstream industry or domestically."

As part of that Plan, Indonesia banned the Export of Nickel Ore in January 2020, and the Government has pledged to the gradually Stop Exporting other Raw Materials.

"I think we can reap many benefits of stopping nickel ore export," Widodo said in late 2021. "Therefore, next year, we will stop raw materials export for bauxite ore, and next, gold and tin ores."

The move downstream is expected to create Jobs, increase Profit margins for the Sector, as well as cut down on Carbon Emissions.










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