JAKARTA, RAKYAT NEWS – Indonesia’s downstream investment reached a record Rp407.8 trillion in 2024, marking an 8.63% increase from the previous year and accounting for 23.8% of the nation’s total investment. The Ministry of Investment (BKPM) reported that the downstream sector, particularly mineral processing, played a pivotal role in driving economic growth and supporting the government’s industrialization agenda.

Nickel smelters dominated the downstream investment, contributing Rp153.2 trillion, followed by copper (Rp68.5 trillion) and bauxite (Rp21.8 trillion). These projects are part of Indonesia’s broader strategy to add value to its natural resources, reduce raw material exports, and strengthen its position in the global supply chain for critical minerals.

Minister of Investment Rosan Roeslani highlighted the consistent growth of downstream investments, emphasizing their importance under President Prabowo’s administration. “We expect downstream contributions to continue rising, as it remains a priority program for the government,” Rosan stated during a press conference on January 31, 2025.

Beyond mineral processing, downstream investments also flowed into other sectors. The forestry industry, including pulp and paper production, attracted Rp64 trillion, while the agricultural sector, focusing on palm oil derivatives and biodiesel, secured Rp67.1 trillion.

These investments reflect Indonesia’s efforts to diversify its downstream activities and create higher-value products.

The petrochemical sector contributed Rp23.1 trillion, with projects producing resins, asphalt, and methanol. Additionally, the electric vehicle (EV) ecosystem, particularly battery production, saw investments of Rp8.4 trillion, underscoring Indonesia’s ambition to become a key player in the global EV market.

Overall, Indonesia’s total investment realization in 2024 reached Rp1,714.2 trillion, exceeding the government’s target of Rp1,650 trillion. Foreign direct investment (FDI) accounted for 52.5% of the total, while domestic investment made up the remaining 47.5%. The investment surge created jobs for over 2.4 million people, a 34.7% increase from 2023.

The base metals, metal goods, and machinery sector emerged as the largest contributor to investment, with Rp238.4 trillion, or 13.9% of the total. This sector’s growth highlights Indonesia’s industrial transformation and its focus on building a robust manufacturing base.

Despite the impressive figures, challenges remain. Analysts caution that the reliance on nickel and other minerals could expose the economy to global price fluctuations. Additionally, environmental concerns related to mining and smelting activities need to be addressed to ensure sustainable growth.

As Indonesia continues to push its downstream agenda, the focus will be on balancing economic growth with environmental sustainability. The success of these investments will determine the country’s ability to achieve its long-term goals of industrialization, job creation, and global competitiveness in the resource sector. (Uki Ruknuddin)