Antara News·Indonesia·Thursday, October 8, 2026 at 12:03 PM UTC

Indonesia considers moratorium on semi-finished processing

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Khaerul Izan, Uyu Liman

Jakarta (ANTARA) - Coordinating Minister for Downstreaming and Energy Transition Bahlil Lahadalia stated that the government will align cross-ministerial programs, ensure locals benefit from natural resources, and consider a moratorium on semi-finished processing industries.

"Continued consumption is fine, but in the long run, I think it will lead to stagnant growth for us," Lahadalia said in a statement released on Thursday.

He noted that while domestic smelters process Indonesian nickel, most output remains semi-finished products exported abroad and re-imported as finished goods, a cycle the government intends to break.

Lahadalia, who also serves as Energy and Mineral Resources Minister, explained that his office will align programs across investment, industry, and energy portfolios to accelerate full downstream processing. Without these structural changes to the economy, national growth risks stagnating.

This synchronization follows a national downstreaming roadmap covering 28 commodities across minerals, coal and natural gas, fisheries, agriculture, plantations, and forestry.

Industrial hubs will expand beyond Java to locations closer to raw materials, establishing new regional growth epicenters.

Lahadalia highlighted nickel as a key example, noting export values rose from $3.3 billion in 2017–2018 to $34 billion in 2023, with projections reaching $38 billion to $40 billion in 2026.

However, he considers this progress insufficient because most smelter production has not reached final manufacturing stages.

Lahadalia emphasized that downstream policies must remain equitable and sustainable.

"This ensures our natural resource management avoids recklessness. This country must be managed for sustainability. We still have future generations to whom we must leave a legacy," he stated.

Addressing energy transition, Lahadalia noted current oil production stands at 600,000 to 610,000 barrels per day (bpd), while domestic consumption reaches 1.6 million bpd.

To bridge this gap, the government is applying technology-based interventions to mature wells, partnering on idle wells, and accelerating key developments like the Masela Block.

Alongside the B50 biodiesel program aiming to halt diesel imports, the government plans to mandate a 20 percent ethanol blend (E20) by 2027–2028 to reduce gasoline imports.

In the coal sector, the government is maintaining supply-demand balance through Work Plan and Budget (RKAB) regulations.

Reaffirming equitable growth principles, Lahadalia said his ministry will provide expanded opportunities for small-scale entrepreneurs and micro, small, and medium enterprises (MSMEs).

"We must not let the local people merely be spectators. We must empower them to be market leaders in their own land," he remarked.

Lahadalia also addressed electricity export requests from neighboring countries, warning of underlying geopolitical factors and stressing that Indonesia must protect its strategic bargaining power.

"We are open to exporting. However, the most important thing is that we dictate the price," he added.

He confirmed the newly established Coordinating Ministry for Downstreaming and Energy Transition will not increase state expenditure, operating within the Energy Ministry's existing Budget Implementation List (DIPA) and drawing a single ministerial salary.

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