Despite its abundant mineral resource, Indonesia still lacks in term of technology and capital to develop its mineral downstream industry, a senior ministry official says.
Secretary of the Ministry of Investment and Downstreaming/Principal Secretary of The Investment Coordinating Board Heldy Satrya Putera said when Indonesia has to solve two things − technology and capital − if it wants to develop its mineral resources.
“Even though we have a lot of nature’s wealth, our mastery of technology is very lacking or still very limited to process this to provide maximum added value, so the
way out that we are currently doing is inviting businesspeople, investors, champions who have technology to develop it in Indonesia. So if it said that downstreaming is still controlled by foreigners, one of the reason is because we still have a shortage in technology,“ Heldy told a discussion in Jakarta on Friday, December 20, 2024.
In order to solve the technological issues, Indonesia has issued a policy that ensures business actors to provide training for Indonesian workers, so they can master the technology and run the factories.
“Hopefully, in the future they will become forerunners for the next industries so that not all industries will be run by foreigners in the future,“ he said.
The second issue is capital. The development of downstream industry especially in mining products, mineral and coals needs huge investment. For example, it needs an investment of Rp 80 trillion (US$5 billion) to build a copper smelter. Indonesia has no local players who can invest in such huge amount of investment including for the mining activity.
“At the same time, local banks do not even dare to provide financial supports for such investment,“ he cited.
The government, he said, is now thinking and formulating about how to consolidate such large sources of fund. Indonesia already has the INA sovereign wealth fund, an investment institution tasked to overcome the financial problem.
