Friday, February 23, 2024

Investment in downstream sector reaches US$ 23.6 billion in 2023

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Gusty da Costa

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The Ministry of Investment/Investment Coordinating Board (BKPM) has noted that investment realization in the downstream sector last year reached US$ 23.6 billion, nearly one third of the total investment realization throughout 2023.

“Downstream investment realization is US$ 23.6 billion, 26.5% of the total investment in 2023,” Investment Minister/Head of BKPM Bahlil Lahadalia told a media conference as quoted as quoted by Bisnisindonesia.com on Wednesday, January 24, 2024.

Bahlil explained that the largest investment was recorded in the mineral sector at US$ 13.7 billion, including for the construction of nickel smelters at US$ 8.5 billion, bauxite smelters at US$ 612.5 million, and copper smelters at US$ 4..4 billion.

Furthermore, downstream investment in the agriculture sector was recorded at US$3.2 billion, forestry US$ 3.2 billion, oil and gas US$ 2.9 billion, and the electric vehicle ecosystem US$ 612.5 million. “In the future, we must encourage the fisheries and agriculture sectors, as well as forestry more massively,” he said.

In the fourth quarter of 2023, the Ministry of Investment noted that investment realization in the downstream sector reached US$ 6.9 billion or 29.9 percent of the total investment realization in the fourth quarter of 2023 which amounted to US$ 23 billion. The largest downstream investment in the fourth quarter of 2023 was also recorded in the downstream sector, which reached US$ 4.1 billion. Meanwhile, investment realization throughout 2023 was recorded at US$ 26.4 billion, growing by 17.5 percent compared to the previous year’s period.

Road Map

Bahlil said in order to achieve Golden Indonesia 1945 vision, he has requested the ministry of investment/investment coordinating board to prepare a grand design for downstream industry that covers all commodities. So the development of downstream industry will not cover only the mineral and mining sectors.

” We have made a road map for all sectors including mining, fishery, forestry, agriculture, and plantation. The total investment for the downstream industry is US$ 545.3 billion until 2040. Certainly it will create jobs,” he said.

The mining sector is only an entry point for the development of downstream industry in other sectors. For example in the copper and nickel sector, prior to the export ban, the value of Indonesia’s nickel export was US$3.3 billion. When Indonesia stopped the nickel export in early 2020, the value of Indonesia nickel export was US$ 33.3 billion.

In copper sector, PT Freeport Indonesia is building a smelter with the capacity of 1,300 tons per year. The progress of the smelter is 95 percent and it will start the production in May or July this year. “So in the future there will be no suspicion, from 3 million copper concentrates that Freeport produces, there are 60 tons of gold, 400,000 tons of copper and other derivatives,” Bahlil said.

Gusty da Costa

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Editor

 

Interview

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