Increase in Mineral Added Value Attracts USD21.28 Billion Investments, Says Energy Minister

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 415.Pers/04/SJI/2021

Date: 25 November 2021

Increase in Mineral Added Value Attracts USD21.28 Billion Investments, Says Energy Minister

Indonesia is an attractive destination for mining investment because it has the world's top ten reserves and production of several mineral commodities, Minister of Energy and Mineral Resources (EMR), Arifin Tasrif, has said during the National Coordination Meeting and the 2021 Investment Services Awards held on Wednesday (24/11). One of these commodities is nickel, which ranks number 1 by reserves and production capacity, continued Arifin.

"Why is Indonesia attractive for mining investment? According to the United States Geological Survey (USGS), the amount of our nickel reserves is number one in the world, with 23 percent of the world's nickel reserves are under Indonesia's surface. Indonesia's nickel production is also number 1. There is also bauxite which is rated number 6 in the global reserves and production volume," Arifin explained.

Additionally, Indonesia's copper reserves and production are number 7 and number 12 respectively, gold is number 5 in potential and 6 in production, while tin is 17% of the world's reserves or number two in terms of potential and production. Besides these commodities, Arifin mentioned rare-earth metals and lithium which potential was huge but had yet been produced because Indonesia did not have the technology to separate and refine the minerals.

Arifin went on to explain that out of 19 smelters currently operating, 13 were nickel smelters. The government has planned to construct additional 17 smelters so that there will be 30 nickel smelters with an investment value of USD8 billion. There will be 53 smelters in business by 2023.

"Other commodities, including bauxite, iron, copper, manganese, lead, and zinc are expected to attract USD21.28 billion in investment. We hope the progress will be accelerated in 2022 because 2023 is the deadline for the export of concentrates. These smelters must be completed. It is the government's commitment to go through with the downstream program," Arifin affirmed.

Next, Arifin mentioned that the electricity needs for the 53 smelters reached 5.6 GW. Good infrastructure is needed to fulfill the needs.

"The electricity needs for these 53 smelters reach 5,600 MW or 5.6 GW, and these smelters spread all over Indonesia. This is certainly a challenge for us, especially of how we supply these industries with green energy. We need good infrastructure. Coincidentally, many clean energy sources are located in the eastern regions of Indonesia. God is fair, after the western regions of Indonesia have developed, the time has come for the eastern regions of Indonesia to progress. I hope that one day, we will achieve a balance, and that Indonesia will become an advanced country," said Arifin.

The program to increase mineral added value also lifts regional growth while contributing to a higher Gross Domestic Product (GDP).

"The policy on the increase of mineral added value has successfully transformed the economy and increased the contribution of each extracted mineral to the GDP. So, the contribution of the mineral and coal subsector in 2018 exceeded that of 2013. Nickel has made a huge contribution, and such contribution will continue to increase as smelters become operational. As a result of the mining transformation, the contribution of the basic metals industry has been on the increase since the value-added program was launched in 2014. Such contribution has doubled since 2010," Arifin concluded. (IY)

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