Danantara commits USD 7 billion to downstream projects to drive Indonesia’s industrial transformation

Badan Pangelola Investasi Daya Anagata Nusantara (BPI Danantara), Indonesia’s new independent sovereign wealth fund launched by President Prabowo Subianto, invested IDR 118.4 trillion (USD 7 billion) in 6 downstream projects across the country. 

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Marking the phase I of the projects, the Investment and Downstream Minister Rosan Roeslani, the CEO of Danantara, explained the president’s aim to expand downstream and renewable energy production and food security as the main driver of Indonesia’s national economic transformation.

The projects are to be conducted across 13 regions, developing an aluminium smelter (USD 2.4 billion) and bauxite based smelter grade alumin refinery (USD 890 million) in Mempawah, West Kalimantan, a bio-aviation fuel refinery (USD 1.1 billion) and a bioethanol plant (USD 80 million) in Cilacap, Java, and Glenmore, Banyuwangi. Salt processing and Mechanical Vapour Recompression (MVR), an energy-efficient, closed-loop evaporation system to be installed in Gresik, manyar and Sampang, East Java.

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“The initial phase of these projects is expected to have a tangible positive impact on the Indonesian economy, both through the creation of industrial added value and employment,” said  Roeslani, indicating more than 6000 direct employment opportunities across 13 sites selected to ensure regional economic growth and industrial resilience.  

Mineral Industry Indonesia (MIND ID) and its members, PT Indonesia Asahan Aluminium (INALUM), the first and sole national aluminium smelter, and  PT Aneka Tambang Tbk (ANTAM), Indonesia’s leading mining company, launched the refining and processing plant, with a capacity of 600 thousand tonnes of aluminium per annum in Mempawah. 

Additionally, PT Krakatau Steel (KRAS) is set to establish a steel slab factory in Cilegon, Banten, to bring mitigation measures in the heavy reliance of the nation on imports in cases of steel slabs, an initiative in the sector of the upstream supply chain. Dony Oskaria, the Chief Operating Officer of Danantara, declared that the plans for the downstream sector development are set right after it. 

The initiative boosts Indonesia’s industrial value chain by advancing national mineral security and ensuring a stable raw material supply for domestic manufacturing. Maroef Sjamsoeddin, the President Director of MIND ID, claims to add value about 70 times the usual bauxite-alumina-aluminium downstream chain, explaining how USD 40 per tonne raw bauxite will become USD 400 per tonne alumina, and again reaching USD 2800-3000 per tonne aluminium. According tohim, the facility will shrink the import dependency besides raising foreign exchange reserves to an estimated IDR 52 trillion (394 per cent of the current exchange rate).

Danantara and relevant ministries are accelerating these projects to ensure they areon time, disciplined and provide substantial economic impactincluding job creation, with special emphasis on sustainable industrialisation. 

Ria Norsan, the Governor of West Kalimantan, the Regent of Mempawah Regency, the King of Mempawah XIV, Commission XII of the Indonesian House of Representatives (DPR RI) members, the Dayak Traditional Council and members of MIND ID, ANTAM, Bukit Asam, INALUM, and PT Borneo Alumina were all present to inaugurate the future objectives of the sustainable Indonesian industrial surge.

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