The performance of Indonesia’s national smelter industry development, including alumina downstream processing, has become one of the key drivers behind the increase in non-tax state revenue (PNBP) from the mineral and coal (minerba) sector. As of May 15, 2026, minerba PNBP realization reached IDR 56 trillion, growing 6.21% year-on-year.The Directorate General of Minerals and coal at the Ministry of Energy and Mineral Resources (ESDM) stated that the achievement was supported by the strengthening of the industrial value chain, particularly through the operation of several smelters integrated into the national downstream program.Director General of Minerals and coal at the Ministry of ESDM, Tri Winarno, explained that the increase in state revenue no longer solely comes from raw material exports, but is gradually shifting toward value-added processed products.“Downstreaming through smelters has become an important factor in strengthening the state revenue base,” Tri said in Jakarta on Friday.During a hearing with Commission VII of the Indonesian House of Representatives (DPR RI), Tri revealed that minerba PNBP realization for January–April 2026 stood at IDR 48.95 trillion before increasing further in mid-May.One of the main focuses of the downstream program is the processing of bauxite into alumina, which serves as a key raw material for the aluminum industry.Indonesia’s bauxite smelters currently have an input capacity of 19.6 million tons per year, producing up to 7.4 million tons of alumina annually. This indicates that the alumina downstream value chain is beginning to take shape and contribute significantly to the national mineral industry.The government recorded 14 smelters integrated into the national mineral downstreaming program. These consist of six nickel smelters, six bauxite smelters, one copper smelter, and one iron smelter.Of the total, five smelters are already fully operational, while the remaining nine are still under construction.Total realized investment for these smelter projects has reached approximately USD 7.8 billion.Several strategic projects already in operation include the PT Aneka Tambang Tbk smelter in Pomalaa, the PT Vale Indonesia Tbk smelter in Sulawesi, and the PT Freeport Indonesia copper smelter in Gresik, which forms part of the Java Integrated Industrial and Ports Estate (JIIPE).The copper smelter has an input capacity of 2 million tons per year and can produce up to 460,000 tons of copper cathode annually.During the same forum, members of Commission VII of the DPR RI emphasized the importance of accelerating the completion of the remaining nine smelters still under construction so that broader economic benefits can be realized sooner.“There needs to be acceleration so production can begin and contribute to the national economy,” said one member of parliament.The government stressed that downstreaming is not solely focused on the physical construction of smelters, but also on operational sustainability, raw material availability, environmental compliance, and industrial competitiveness.These efforts are expected to strengthen Indonesia’s position as a mineral-processing nation rather than merely a raw material exporter.However, several challenges remain, including investment distribution, raw material supply stability, and the readiness of supporting infrastructure in industrial areas.
Source https://djakarta-miningclub.com