President Jokowi Pushes For Down Streaming of Mining Products

President Jokowi opens the 2022 National Coordination Meeting on Investment, at the Ritz-Carlton Hotel, Jakarta, Wednesday (11/30). (Photo by: BPMI of Presidential Secretariat/ Rusman)

The Government is committed to carry out down streaming process of mining products to increase value added.

The statement was delivered by President Joko “Jokowi” Widodo when opened the 2022 National Coordination Meeting on Investment, at the Ritz-Carlton Hotel, Jakarta, Wednesday (11/30).

“I have mentioned it over and over again that we want to achieve value added from the down streaming process. We should stop exporting raw materials. Stop it. Right after we receive investment, develop (the facilities), have a partnership with external parties, and establish a cooperation between central and regional (Government) or between Jakarta and other regions, we can achieve the value added,” he said.

The President went on to say that Indonesia used to export nickel in raw materials worth US$1.1 billion several years ago. However, after the Government built smelters in the country and stopped export of nickel ore, the value of Indonesia’s export of nickel jumped 18 times to US$20.8 billion in 2021.

Because of this policy, the European Union (EU) filed a lawsuit to the World Trade Organization (WTO). However, Indonesia has to admit defeat in this nickel ore trade dispute. Despite the lost, the Government is still committed to carry on down streaming policy to other mining products, including bauxite.

“It’s okay to lose. I told the minister to file an appeal. The next step is to carry on down streaming process for bauxite. It means bauxite as raw material must be processed in Indonesia so we can generate the value added. Afterwards, other commodities, for instance coffee, should not be exported in form of raw material. We have been doing this for decades. Stop it, find investors. Get investment so we can receive the value added,” he said.

The President added that industrial down streaming also contributes to Indonesia’s positive trade balance.

“As for nickel, (the value) has jumped significantly from Rp20 trillion to Rp300 trillion. Our trade balance, for 29 consecutive months is positive, after had been showing negative results for decades. We have been receiving positive balance since 29 months ago. This is our goal,” he said.

President Jokowi also underscored that filing a lawsuit is the right of any state thinking policies of the Indonesian Government is unfavorable for them. For instance, the EU will close some industries and have more unemployment if nickel ore is processed in Indonesia. However, the Head of State emphasized that Indonesia also has the right to become a developed country.

“We want to become a developed country. We want to open more jobs. If we are afraid of the lawsuit and give up, we will never become a developed country. Therefore, I told the ministers, ‘We cannot stop. Don’t limit ourselves in nickel (down streaming), but also other (mining) products,” he concluded. (TGH/UN) (RAS/MMB)