RESSED UI urges integrated mining downstream development from extraction to finished products

Indonesia’s mineral wealth should not stop at the mine gate or a smelter, according to the Research Group on Energy Security for Sustainable Development at the University of Indonesia, or RESSED UI.

The group wants downstream development to operate as one industrial ecosystem, connecting raw materials at the mine mouth with processing, manufacturing and finished products for domestic and global markets. Ali Ahmudi, RESSED UI’s chairman, said the country needed certainty at every stage of the chain.

“Downstreaming is not just about building smelters. There must be certainty of supply from upstream, and the processed output must also be connected to downstream industries until it becomes a finished product,” Ali said in Jakarta, according to a statement cited on Sept. 3.

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Downstreaming is not just about building smelters. There must be certainty of supply from upstream, and the processed output must also be connected to downstream industries until it becomes a finished product.

He described smelters as only the middle part of the process. Processing facilities cannot operate at full potential without dependable supplies from mines or industries capable of absorbing their output. Indonesia’s longstanding export of raw materials, he said, has produced economic benefits that do not match the scale of the country’s mineral wealth.

“If it is not processed downstream, it will not provide any added value and will remain only raw material. But with downstreaming, the added value will certainly multiply,” he said.

Geological data cited by the group shows Indonesia holds about 42 percent of global nickel reserves and also has strategic reserves of tin, bauxite, gold, coal and copper. Ali said the country should extend the domestic value chain beyond extraction and initial processing. He also pointed to foreign control of some strategic reserves and said greater national ownership under mining regulations could help ensure that more of the wealth benefits Indonesia. The approach aligns with Article 33(3) of Indonesia’s Constitution, which places natural resources under state control for the greatest prosperity of the people.

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If it is not processed downstream, it will not provide any added value and will remain only raw material. But with downstreaming, the added value will certainly multiply.