Government Initiates Copper Industry Downstreaming Policy to Boost National Economic Value-Added

Jakarta, INTI - The Indonesian government has introduced a strategic policy to downstream industries aimed at enhancing the national economic value-added and maintaining economic resilience amidst global challenges. A key focus of this policy is reducing dependence on imported copper products such as copper tubes, copper tape, and components for Electric Vehicles (EV).

Recent data indicates that Indonesia still heavily relies on imports for much of its required copper downstream products, including cables, inverters, and EV batteries. To address this, the government is promoting the development of processing industries in Special Economic Zones (SEZs) as centers for downstream activities.

A concrete step in supporting this policy is the inauguration of PT Freeport Indonesia's (PTFI) Smelter at the Gresik SEZ. With an investment of approximately Rp58 trillion or around USD3.7 billion, this smelter is the largest copper refining facility globally, capable of refining up to 1.7 million tons of copper concentrate annually. Together with other smelters, total refining capacity in the Gresik SEZ reaches 3 million tons of copper concentrate per year, producing 600,000 tons of copper cathode, 50 tons of gold, and 200 tons of silver.

According to Coordinating Minister for Economic Affairs Airlangga Hartarto, the presence of this smelter not only builds robust economic infrastructure but also has positive impacts through job creation and multiplier effects for the local community. Full integration from mining processes to final products is also expected to increase national revenue through royalty payments on gold and silver production.

It is expected that the Gresik SEZ, with investments totaling Rp75.2 trillion and employing more than 35,000 workers, will be a key driver in developing an industrial ecosystem that supports downstream activities, particularly in the EV sector. This step is anticipated to strengthen Indonesia's export position, thereby supporting the stability of the Indonesian rupiah exchange rate.

The presence and operation of the PTFI smelter in the Gresik SEZ also enjoy support from various stakeholders, including Minister of Investment Bahlil Lahadalia and several high-ranking government officials and members of the Indonesian Parliament. This demonstrates full commitment to building a resilient and sustainable economic infrastructure.

Thus, the copper industry downstreaming policy is not only a strategic move to support national economic growth but also a concrete effort to maintain economic resilience in the future.

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