Mining and Oil Downstream Could Add to Gross Domestic Product

Downstream Mining Indonesia Receives Up to US$ 33 Billion

Indonesia remains in its position to stop raw mineral exports despite being sued by the European Union. The President of Indonesia, Joko Widodo (Jokowi), emphasized that he would continue to downstream the mine. Indonesia will not be afraid of other countries’ lawsuits.

Jokowi emphasized that if the downstream of mining and oil and gas commodities in the country goes ahead, it is projected to be able to increase the Gross Domestic Product (GDP) by US$ 699 billion and create jobs 8.8 million.

The success of this project will have a major impact on Indonesia as well as create as many job opportunities as possible. For this reason, Jokowi confirmed that he would stop nickel, bauxite, and copper exports this year.

Jokowi also explained why the government would stop bauxite exports this year. He reasoned that the added value of bauxite has not been felt by this country.

Indonesia is the world’s 3rd largest bauxite exporter, but unfortunately for exports of finished products, namely aluminum, it is only in the 33rd position in the world.

According to him, this condition is inversely proportional to China. He said that China’s bauxite exports are the 18th largest in the world, but China’s solar panel exports are the 1st largest in the world. In fact, he continued, the source of the raw material for bauxite also comes from Indonesia.

Likewise, with tin, he said that Indonesia is the owner of the world’s 2nd largest tin reserves and the 1st largest exporter of tin in the world.

The largest tin-importing country in the world is China. In fact, he continued, if this tin is reprocessed domestically, the added value can reach 69 times.

Furthermore, as is the case with nickel commodities, where the government has banned the export of nickel ore since 2020 which has finally brought many benefits to this country because the nickel sold is already in the product of processing and refining products with high metal content.

Jokowi explained, when Indonesia was still exporting nickel ore, the value that this country obtained was only around US$ 1.1 billion or Rp. 17 trillion. But in 2022, when what is being sold is in the form of processed and metal products, the export value of nickel will increase to around US$ 30-33 billion or around Rp. 450 trillion.

He advised that Indonesia must remain consistent in its downstream efforts despite repeated demands from the European Union.

He also reiterated that Indonesia is not afraid of being sued by other countries. The government will prepare the best lawyers if it is sued internationally again, such as Indonesia being sued by the European Union at the World Trade Organization (WTO) regarding the nickel ore export ban policy in 2020.