Indonesia Critical Minerals

Indonesia has been recognized as one of the world’s newly developed countries and is the largest economy in Southeast Asia. Some experts predict that by 2024, Indonesia will be the 5th largest economy in the world. 

With more than 17,000 islands, Indonesia possesses a significant amount of natural resources, specifically critical minerals. Critical minerals are a group of minerals that can support future technology development. Examples of critical minerals are cobalt, nickel, platinum, tungsten, magnesium, and chromium. These minerals are defined as critical because of their limited availability.  Furthermore, the factors contributing to the limitation of critical minerals are due to the growing global demand, trade policy, and geo-political aspects.

Currently, Indonesia’s critical mineral resources include nickel (1.5 billion tons), copper (640 million tons), bauxite (927 million tons), and tin ( 1.2 billion tons). Indonesia is one of the largest nickel producers in the world. These resources will be the focus for upstream development to manage its natural resources, especially for supporting technology development in Indonesia. The role of critical minerals is vital for specific industries such as information technology, electric vehicles, health technology, and clean and renewable energy, including energy storage for intermittency to support the wind, solar, and defense. Meanwhile, to support the midstream and downstream development aspects, the Indonesian government issued a regulation prohibiting the export of raw materials. With this regulation, the Indonesian government expects to develop Indonesia’s smelting industry locally. This regulation also aims to attract new investment from foreign investors, especially targeting the smelting industry.

Indonesia is a member of the Indo Pacific Economic Forum (IPEF), which controls 40% of world’s economy and 28% of the world’s trade and services. Understanding the importance of critical minerals and Indonesia’s proposed mining and extraction is essential.. Hence, IPEF’s members approved Indonesia’s proposal to include critical minerals within IPEF’s Pillar I. This shows Indonesia’s strong commitment to developing its critical mineral resources. This commitment will have an impact on the technology solutions needs, supporting the critical mineral industry and its ecosystem. Technology solutions playing a key role in the development of the industry include software, communication equipment, drilling, ground penetrating radar (GPR), land mapping, heavy equipment, lubricants, and more. In addition, since most, if not all, of the mining locations in Indonesia are in remote areas, technology solutions for remote area power generation and environmental technology solutions are extremely important peripheral factors and offer additional opportunities to U.S. companies. Given the growing number of mining companies in Indonesia, it is important to establish their corporate’s public rapport, showing a commitment to support the Environmental Social and Governance (ESG) program.

U.S. companies operating in technology solutions across mining, remote power generation, and environmental have many opportunities to support the future development of Indonesia’s critical minerals sector.

For more information, please kindly contact: Commercial Specialist Mr. Mario Simanjuntak (Mario.Simanjuntak@trade.gov)