Indonesia Shifts Downstream Focus to EV Batteries, BESS

RRI.CO.ID, Jakarta - Indonesia is entering a new phase of mineral downstreaming, with the government targeting investments worth USD 618.1 billion by 2040 to expand value-added industries.

Deputy for Strategic Investment Downstreaming at the Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) Heldy Satrya Putera said the government is shifting its focus from building smelters and refining facilities to developing electric vehicle (EV) battery industries, Battery Energy Storage Systems (BESS), and other high-value manufacturing sectors.

“Currently, our priority is entering phase two, which is to expand development into the EV battery industry, Battery Energy Storage Systems (BESS), and other high-value-added manufacturing sectors,” Heldy said in a statement received in Jakarta on Wednesday, Sept. 30, as quoted by Antara.

Heldy said the government has prepared a downstream processing roadmap covering 28 strategic commodities, with estimated investment requirements reaching USD 618.1 billion by 2040.

Indonesia’s downstream strategy is being implemented in three phases, building on the mineral-processing foundation established through smelters and refining facilities.

Downstream investment reached IDR 300.1 trillion (USD 16.8 billion) in the first half of 2026, accounting for 29.7 percent of total national investment realization. The figure represented a 6.9 percent increase from the same period last year.

Foreign direct investment contributed IDR 212.8 trillion, or 70.9 percent of total downstream investment, while domestic investment reached IDR 87.3 trillion, or 29.1 percent.

According to Heldy, the achievement demonstrates the continued development of Indonesia’s downstream industries while creating opportunities to strengthen the country’s position in the global critical minerals value chain.

The next stage will focus on developing competitive markets, attracting long-term investment, and ensuring domestic industries can produce goods that meet the needs of global buyers.

The ministry, in collaboration with Fastmarkets, also organized the International Critical Minerals and Metals Summit (ICMMS) 2026 in Bali from Sept. 27 to 30.

The event brought together government officials, investors, industry players, processing companies, battery material producers, financial institutions and commodity traders from various countries.

In the nickel-processing sector, discussions included the economics of High Pressure Acid Leach (HPAL), sulfuric acid competitiveness and alternative processing technologies.

Meanwhile, the development of precursor and cathode materials faces more complex challenges, including technology, product quality, project economics, and market certainty, in addition to raw material availability.

As a result, discussions at ICMMS 2026 also highlighted the importance of downstream battery products that have clear market demand and can compete within the global electric vehicle supply chain. ***