Indonesia continues to move forward in optimizing the potential of its natural resources as evidenced by the downstream mining industry program. Until 2024, this program has had a significant impact in building a national economy based on added value that focuses on copper, bauxite, and silica sand commodities. If carried out and realized in accordance with the existing investment plan, downstreaming will be a prerequisite for the processing industry sector to support the achievement of Indonesia Emas 2045. Downstreaming of the mining industry, especially copper, bauxite, and silica sand, was initially carried out through the construction of copper and bauxite smelters, as well as the development of products made from silica sand.
This statement was expressed in research by the Faculty of Economics and Business, University of Indonesia (FEB UI) entitled “Study of the Impact of Mining Industry Downstreaming on the Economy, Social, and Environment: Copper, Bauxite, and Silica Sand”.
Deputy Head of the Center for Sharia Economics and Business, Faculty of Economics and Business, University of Indonesia (PEBS FEB UI) Nur Kholis said that the requirement for the processing industry sector to be able to support the achievement of Indonesia Emas 2045 is the use of products from smelter processing. The product can be downstreamed again as input in the development of products that have higher added value domestically to the final product.
Downstreaming has enabled Indonesia to no longer just export raw materials. Value-added products such as copper cathodes, alumina, and silica sand-based products such as glass and ceramics, and in the future solar panels and semiconductors are now starting to be produced domestically. This is a strategic step to strengthen the national industrial structure and open up new economic opportunities. Indonesia cannot continue to rely on exports of raw materials and imports of intermediate goods from abroad. Downstreaming is Indonesia’s path to economic independence.
“By increasing investment in order to produce value-added products domestically, we create jobs, increase people’s income, and ensure that our natural resources truly provide maximum benefits for the nation,” said Nur Kholis in his official statement, Wednesday (15/1/2025).
In addition, Nur Kholis explained, the impact of the downstreaming of copper, bauxite, and silica sand has begun to be felt in areas such as Gresik Regency (East Java), Mempawah Regency (West Kalimantan), and Batang Regency (Central Java), where the construction of smelters has become the driving force of the local economy. In addition to increasing Gross Regional Domestic Product (GRDP) and regional income, this policy has also created thousands of jobs, both directly and indirectly.
However, downstreaming also faces challenges such as limited infrastructure and technology, limited skilled workers, fluctuating market demand, and negative impacts on the environment. According to him, the government needs to take a number of strategic steps to face these challenges. For example, human resource development, research and development of technology, application of environmentally friendly technology, product diversification, and strengthening international cooperation.
“Downstreaming of the mining industry, especially copper, bauxite, and silica sand also needs to continue to be encouraged to apply environmentally friendly technology in all mining mineral processing facilities. Effective waste management must be an integrated part of the implementation of downstreaming,” he said.
January 15, 2025, CNCB Indonesia(https://www.cnbcindonesia.com/news/20250115200002-4-603501/hilirisasi-jadi-prasyarat-sektor-industri-menuju-indonesia-emas-2045)