DIGIVESTASI - Mineral and Coal Downstreaming as a Driver of Indonesia’s Economy, Downstreaming in the mineral and coal sector is seen as a key driver for Indonesia's economy, opening up opportunities for the country to compete with other developed nations. Former President Joko Widodo emphasized the importance of the downstreaming agenda to increase the added value of mineral resources, which were previously exported in raw form.

Jokowi provided an example of the impact of downstreaming on nickel exports. "In 2015, our nickel exports reached $3 billion or about IDR 45 trillion. After the export ban in 2021, this figure skyrocketed to IDR 340 trillion, and then to IDR 520 trillion in 2022 and 2023," Jokowi stated. He also added that the state’s revenue from this sector includes corporate taxes, employee taxes, export duties, and non-tax state revenues, all of which are substantial.

In line with this, Finance Minister Sri Mulyani emphasized that downstreaming in the mineral and coal sector has made a real impact on the national economy. Data from the Ministry of Finance show significant contributions from downstreaming to economic growth, particularly from the nickel sector.

Sri Mulyani revealed that downstreaming has led to a trade surplus of $36.9 billion and has created new sources of growth outside of Java. Central Sulawesi and North Maluku recorded economic growth rates of 6.4% and 6.9%, respectively, in 2023, well above the national average.

Impact of Nickel Downstreaming in Central Sulawesi

The positive effects of nickel downstreaming have also been directly felt by the communities in mining areas. In Q2-2024, Central Sulawesi's economy grew by 9.75%, higher than the national growth rate of 5.05%. The region became the fourth-highest in Indonesia in terms of economic growth, following West Papua, NTB, and North Maluku.

Central Sulawesi's contribution to the national economy reached 1.6% in Q2-2024, while its contribution to Sulawesi Island's economy was 23.3%. Data from BPS Central Sulawesi also shows that the nickel downstreaming sector significantly contributed to the regional gross domestic product (PDRB), with the nickel smelting industry accounting for 41.94% of the total PDRB in the province.

Economic Changes in North Morowali

The positive impact of nickel downstreaming has also been directly felt by the people living around the smelter locations, such as in North Morowali, Central Sulawesi. One local resident, Roki Nirwan, shared that the presence of the nickel smelter has driven economic activity growth. "There weren’t many traders before, but after the smelter company came, the number of traders grew rapidly and the number of customers increased," he said.

Additionally, the local government has also benefited from the presence of the nickel processing industry. PT Gunbuster Nickel Industry (PT GNI), one of the pioneers of nickel downstreaming in North Morowali, is committed to maintaining environmental sustainability while building good relations with the community and stakeholders.

The company has taken various steps, such as hiring local residents, running corporate social responsibility programs, and empowering the local community. These efforts show how nickel downstreaming not only provides economic benefits but also brings positive social changes in mining regions.

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