Indonesia announced 13 new resource processing projects requiring $15 billion in investment, expanding President Prabowo Subianto's ambitious industrial policy to capture more value from the country's vast natural resources.
Energy and Mineral Resources Minister Bahlil Lahadalia revealed the additional projects following a closed-door meeting with President Prabowo at Hambalang, Bogor. The Rp 239 trillion investment package builds on an initial 20 downstreaming projects, several of which have already broken ground.
"The government is adding 13 more downstreaming items with total investment of around Rp 239 trillion, and we will finalize the details," Bahlil said in remarks broadcast on the Presidential Secretariat's YouTube channel Thursday.
The downstreaming strategy—processing raw materials domestically rather than exporting them for refining abroad—represents the cornerstone of Prabowo's economic nationalism. Indonesia holds the world's largest nickel reserves, critical for electric vehicle batteries, making the policy particularly significant for global supply chains.
Six initial projects groundbroken in February by state investment holding company Danantara include an aluminum smelter in West Kalimantan, bioethanol and bioaviation fuel plants in Java, and integrated poultry operations across six provinces. Those projects alone total $7 billion in committed capital.
Bahlil emphasized that Prabowo has prioritized energy security and diversification, instructing officials to optimize alternative fuels including ethanol, palm oil-based biodiesel, and renewable energy sources.
"The president wants us to ensure the energy transition through renewable energy can also be accomplished," Bahlil said, noting that coal production and pricing remain under careful government management to balance export revenues with domestic affordability.
The ambitious expansion comes as Indonesia leverages its resource wealth to climb global manufacturing value chains. Last year, downstreaming projects accounted for 30% of foreign investment inflows, totaling Rp 584.1 trillion according to Danantara chief Rosan Roeslano.
In Indonesia, as across archipelagic democracies, unity in diversity requires constant negotiation across islands, ethnicities, and beliefs. The industrial policy must balance Java's manufacturing centers with resource-rich outer islands, ensuring equitable development while maintaining investor confidence.
The government's processing mandate for nickel has already reshaped global markets, forcing international buyers to build smelters in Indonesia or face export bans. The strategy has created thousands of jobs but also raised environmental concerns in mining regions.
Analysts note that Indonesia's success in moving up the value chain could provide a model for other resource-rich developing nations. The country's democratic accountability mechanisms—including provincial autonomy and legislative oversight—offer governance structures absent in many resource exporters.
Bahlil did not specify which commodities the 13 new projects will target, though aluminum, copper, and rare earth elements represent likely candidates given existing extraction capacity and global demand trends.
The investment scale underscores Indonesia's ambition to become a regional manufacturing powerhouse, leveraging ASEAN market access and natural resource advantages to attract capital amid shifting global supply chains.
