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Energy transition to boost demand for metals, says Luhut
The government plans to continue focusing on downstream industrialization to tap into the archipelago's rich metal reserves as the global energy transition drives up metals demand.
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Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan speaks at the Mandiri Investment Forum 2022 via video link on Feb. 9 in Jakarta. (Bank Mandiri/Bank Mandiri)
Indonesia's top investment minister has said he expects demand for metals to increase during the global energy transition.
“This is because low-carbon technology, including electric cars, requires more metals than fossil fuels,” Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said at the Mandiri Investment Forum 2022 on Wednesday.
“The government will continue to encourage downstream industrialization, [considering] Indonesia’s abundant reserves of nickel, bauxite, copper and tin, which are critical for [developing] clean energy technologies,” said Luhut, who attended the event virtually.
The energy transition is expected to have a dramatic structural impact on a number of metal markets in the next five to 10 years, especially for copper and nickel, according to a report by S&P Global Platts that cited analysts from Macquarie Group at an Oct. 7, 2021 media briefing.
Copper, which used in power cords, became a hot commodity last year as prices soared to more than US$10,000 per ton. Used for wiring, cooling and heating elements, the metal is critical for the development of decarbonization technology.
Luhut went on to say that the downstream strategy would focus on green industrial parks, pointing to the country’s first green industrial estate development project in Tanah Kuning, North Kalimantan, as the next driver of downstream industrialization. Other related projects in North Kalimantan include environmentally friendly manufacturing plants for hydrogen, ammonia and aluminum.
Downstream industry development is part of the government’s strategy to boost economic growth.
