Remarks of President Joko Widodo on the 79th Anniversary of Mining and Energy, Kempinski Hotel Grand Ballroom, Jakarta, October 10, 2024

Bismillahirrahmanirrahim.

Assalamu’alaikum warahmatullahi wabarakatuh.

Good evening,

peace be upon us all,

Om swastiastu,

Namo buddhaya,

Greetings of Virtue.

Distiguished Minister of Energy and Mineral Resources, Mr. Bahlil Lahadalia, and Ibu;

Distinguished the former Minister of Energy and Mineral Resources Mr. Ignasius Jonan, Mr. Arcandra Tahar, also Mr. Susilo Siswoutomo, Deputy Minister;

Distinguished ESDM stakeholders, Subroto Award recipients, officials and all employees of the Ministry of Energy and Mineral Resources, CEOs, entrepreneurs,

Ladies and Gentlemen,

First of all, I would like to wish you a happy birthday, happy 79th Anniversary of Mining and Energy, especially for the big family of the Ministry of Energy and Mineral Resources and the ESDM sector.

The ESDM sector is a very strategic sector and has enormous potential, a sector that provides a large multiplier effect for the national economy. We know that from 2014 until today, the PNBP received by the state from ESDM, meaning ten years, is very large, approximately Rp1,800 trillion. If you look two years ago in 2022, it was Rp348 trillion, then in 2023 it was Rp229 trillion. Per year amount is also very large.

Therefore, the Minister has been pushing me back and forth, asking me more than once or twice. I will sign it when it reaches my desk. As of tonight, it has not yet reached my desk, but it is almost there. So as soon as it reaches my desk, I will sign the allowance.

I could have said that I have signed it. But I don’t want to, it’s not yet, I have to say as it is, I haven’t signed it and it hasn’t arrived on my desk. And indeed, the Minister of Energy and Mineral Resources is very agile, the goods are here and pushed, here and pushed, here and pushed, and always asks me, “Have you signed, sir?” I haven’t signed yet, so I answer not yet. Just this afternoon I met him, “have you signed, sir?” Not yet. Yes, I haven’t. So if I answer, it’s a lie.

The first thing I would like to say is that added value in the EMR sector is very important, because the value is very large. Added value must be in the country, added value must be in the country, so don’t send raw materials. We shouldn’t send raw material. We shouldn’t send it just to be enjoyed by others. It can’t be like that, it can’t be like that anymore. Job opportunities are created there, and they enjoy the profits. No way, we have been sending our raw goods, our raw materials, our raw materials abroad for more than 400 years. Those countries became the rich ones, they are the developed countries, while we cannot jump higher. This is what I often say, the importance of downstreaming/industrial downstreaming. It’s very important. No one should back down on this one issue for any reason.

Imagine Freeport, managing 3 million copper concentrates a year, they have been processing it for more than 50 years. Where is the smelter? Not in the country. There’s a big one, Amman, 900 thousand tons of copper concentrate being processed outside for so many years.

Therefore, I give appreciation, highly appreciate the hard work of the Ministry of Energy and Mineral Resources and all levels that until today we have more than 108 smelters. And that is the fruit of your hard work, consistency, courage to say no. The smelter must be built here, the industry and its derivatives must be built here. Indeed, this is just entering the smelter so that the derivative industry must also be encouraged. Freeport so, later the derivative industries here must all be around the location of the smelter industry owned by Freeport, be it copper foil, and others, everything. Nickel is also the same, it must reach as many derivatives as possible, because the added value is there.

We have been exporting raw materials for hundreds of years. Imagine for nickel alone, when we exported in the form of raw materials, the result was USD2.9 billion per year raw, raw material. Once we stop in 2020, then enter the derivative industry, in 2023 the result was USD34.4 billion. Imagine the jump. The jump is how many times, from Rp40 trillion to 34 [USD34 billion], means approximately Rp500 trillion more. This is a huge jump.

Many people ask me, “Sir, the benefit is for the company [downstreaming industry]”. Don’t be mistaken, the state gets a lot of revenue, income from it, both in the form of corporate tax, Income Tax 21, from royalties, if we have shares in it like Freeport, we get dividends, there is local tax, there is PBB, there is PNBP, it’s huge. If all of this goes into the industry, into derivative industries, it will jump state revenue. And we can use it all to build village roads, build toll roads, build new ports, build new airports, for subsidies, for social assistance for our people. So if nickel, copper, bauxite, tin, gold, everything is encouraged, including coal to be encouraged to enter DME and others, this will provide enormous added value.

Secondly, the first is downstreaming, the second is related to oil lifting which must increase. By any means, it must increase. Make the wells that we have more productive. Because once production drops, we spend a lot of money. Just this afternoon, I also received the Minister of Finance, “Sir, our oil lifting cannot be allowed to continue to fall like this”. Because if we calculate it, it looks like it’s only a small decrease of 100, 50. But if you calculate it into money, it means that our imports, our oil imports, our gas imports, are hundreds of trillions that we have to spend. This means that our foreign exchange is lost. Whether it is done by ourselves, whether it is done by state-owned enterprises, whether it is done by Pertamina, whether it is done in cooperation with the private sector, whether it is done by foreign companies, everything is done. We should not let our oil lifting fall by any amount, not even a liter, it must increase, every year it must increase.

Thirdly, we should also be careful with regulations. Everything related to things that take a long time, circling from table one, to table two, to table three, to table four, to table five, must begin to be simplified, Mr. Minister, so that once again, investment comes to our country, job opportunities are open, then anyone can participate in exploration and finally back to our oil and gas lifting to increase.

Without simplifying licenses, without simplifying the regulations that we have, it is very difficult for us to compete with other countries. Because once again, I am saying that in the future, fast countries will beat slow countries, not big countries beat small countries, not rich countries beat developing countries, but fast countries will beat slow countries. A fast country will beat a slow country.

I think that’s what I would like to say on this auspicious occasion. Once again, Happy 79th Anniversary of Mining and Energy.

Good evening.

Thank you.

Wassalamu’alaikum warahmatullahi wabarakatuh.

(AP/LW)