Indonesia, the Global Giant in Nickel and Bauxite: Can It Become a Key Player in the Global Market?

Jakarta, INTI - Indonesia is recognized as one of the countries with the world’s largest natural resources, especially in the mineral sector. According to data from the United States Geological Survey (USGS) and the Geological Agency of the Ministry of Energy and Mineral Resources (ESDM), Indonesia holds the second-largest nickel reserves globally and the fourth-largest bauxite reserves. This puts Indonesia in a highly influential position as a raw material supplier for global industries.

Indonesia’s Critical Role in Global Mineral Supply

Head of the Geological Agency of the Ministry of Energy and Mineral Resources, Muhammad Wafid, emphasized Indonesia’s strategic role in the global mineral industry. “As a country with abundant natural resources, Indonesia is rightly positioned as a major player. This means that Indonesia has a significant role in supplying raw materials, both in terms of demand and supply for nickel and bauxite worldwide,” Wafid said during an online webinar titled "Prospects and Business in Future Mineral Industries," hosted by the Surabaya Institute of Technology on Saturday (November 2).

Based on data from the Geological Agency, as of 2023, Indonesia has nickel resources of 18.5 billion tons of ore, with total reserves of 5.3 billion tons of ore. As for bauxite, the total resources are 7.4 billion tons of ore, with reserves amounting to 2.7 billion tons of ore. This vast potential highlights Indonesia’s critical role in the global mineral market, both as a key supplier and long-term reserve provider.

Downstreaming Efforts and the Raw Material Export Ban

To maximize state revenue from these mineral products, Indonesia has gradually implemented an export ban on raw materials over recent years. The main objective of this policy is to encourage domestic industry downstreaming, boost the added value of products, and reduce reliance on raw material exports.

Wafid mentioned that this downstreaming effort has shown significant progress. “According to data from the Coordinating Ministry for Maritime and Investment Affairs, there are currently 147 smelters operating in Indonesia. Of these, 49 smelters use pyrometallurgical processing methods and are in operation, 35 are under construction, and 36 are in planning stages. For hydrometallurgical processing, there are five smelters in operation, with three under construction and 19 in the planning phase,” he explained.

With these smelter facilities, the government hopes to maximize state revenue and create new job opportunities for local communities. Furthermore, downstreaming is expected to support economic growth by processing minerals domestically.

Downstreaming as a National Economic Priority

The administration under President Prabowo Subianto has made downstreaming one of its main priorities on the national economic agenda. According to Prabowo, downstreaming must be applied to all of Indonesia’s commodities to improve the welfare of the people.

“Downstreaming will be applied to all our commodities. The added value of these commodities must strengthen our economy, so our people can achieve a better quality of life,” he said.

Safeguarding Reserve Availability for the Future

Continuous exploitation of nickel and bauxite products will inevitably decrease the reserves. To address this, the Geological Agency continues to survey and explore new areas to identify potential resource reserves.

“Over the past five years, from 2019 to 2023, we have observed a significant increase in inferred and measured resources,” Wafid concluded.