The topic of mining downstreaming has become a heated discussion among presidential and vice-presidential candidates in Indonesia. Presidential candidate number 3, Ganjar Pranowo, recently argued that the more appropriate term for Indonesia’s current condition is “smelterization” rather than downstreaming.
Bisman Bakhtiar, Executive Director of the Center for Energy and Mining Law Studies (Pushep), supports this view by emphasizing that downstreaming in Indonesia is still limited to processing in smelters for mining commodities, resulting in insignificant added value.
“Downstreaming ideally reaches its derivatives in the form of finished products, not just processing and refining, but into downstream industries,” expressed Bisman.
Until now, due to the lack of finished products, the downstreaming program has not optimally impacted various aspects of community life.
The economic added value is still low, and the expected multiplier effect has not been created maximally, leading to suboptimal regional economic growth.
Bisman compared Indonesia with other countries such as China, Russia, Australia, and Canada, which he considered successful in implementing downstreaming.
These countries are able to bring significant positive impacts on the economy and society by executing downstreaming into derivative industries with finished products.
“The current downstreaming in Indonesia is still capital-intensive and has not reached the labor-intensive stage. The existing smelters still employ a large number of foreign workers, while local workers are still not maximized,” he added.
In viewing this situation, Bisman suggested the necessity for the government to create a comprehensive roadmap for downstreaming, considering environmental support, and conducting evaluations of downstreaming policies, at least for nickel and copper commodities in the short term.
Komaidi Notonegoro, Executive Director of the Reforminer Institute, hoped that the government’s downstreaming efforts, especially in the mineral and mining sectors, could stimulate the domestic manufacturing industry.
In a discussion, he stated the need for innovation, research, and forcing investors to share technology to enable downstreaming to reach higher stages, such as development into batteries.
Earlier, Hotasi Nababan, Deputy Secretary of the National Election Winning Team for Ganjar Pranowo-Mahfud MD, emphasized that downstreaming is a relied-upon engine to drive economic growth.
Despite recognizing that the downstreaming process for nickel towards becoming batteries is still long, Hotasi stated that what is happening now is still limited to “smelterization” and requires deeper innovation and research.
