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Indonesia sees higher revenue from downstream mineral processing

Indonesia reaffirmed its commitment to promoting downstream industries, particularly nickel-based electric vehicle battery production, while considering additional incentives for companies using domestically sourced materials.

Miners working at an underground site. (Photo: ANTARA)
Miners working at an underground site. (Photo: ANTARA)

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Jakarta (VNA) – Indonesia is continuing to advance its downstream mineral processing strategy, with non-tax state revenue from the mineral and coal sector reaching 56 trillion IDR (about 3.1 billion USD) so far this year, up 6.21% year-on-year.

According to the Directorate General of Minerals and Coal under the Ministry of Energy and Mineral Resources, the increase was mainly driven by the operation of five smelters that have come online under the country's downstream industrialisation programme.

The Indonesian government said the projects have attracted around 7.8 billion USD in investment. Once all 14 smelters are completed, nickel-processing facilities are expected to process nearly 25 million tonnes of ore annually and produce over 924,000 tonnes of nickel, while bauxite plants will generate about 7.4 million tonnes of alumina per year.

Director General of Minerals and Coal Tri Winarno said Indonesia’s downstream strategy extends beyond building smelters to ensuring raw material supply, environmental standards and the long-term sustainability of the entire industrial chain.

Meanwhile, the government is considering export taxes and windfall profit taxes on coal and nickel to boost state revenue and curb resource losses.

Finance Minister Purbaya Yudhi Sadewa said the absence of export taxes on the two commodities has created loopholes for price misreporting and smuggling.

Indonesia also reaffirmed its commitment to promoting downstream industries, particularly nickel-based electric vehicle battery production, while considering additional incentives for companies using domestically sourced materials./.

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