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View all search resultsRI urged to honor contracts, keep doors open in mineral tug-of-war
Despite opportunities to align its critical mineral supply chains with Western countries, experts urge Jakarta to safeguard its reputation as a reliable partner by upholding agreements with existing investors, many of whom are Chinese firms.
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A worker in protective gear uses a tool to scoop molten metal on Sept. 16, 2025, at Harita Nickel’s smelting facility on Obi Island in South Halmahera, North Maluku. (AFP/Daeng Mansur)
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s the United States and its European allies intensify efforts to onshore critical mineral supply chains and reduce reliance on China, Indonesia finds itself at a strategic crossroads.
Until now, the country’s mineral sector has been dominated by Chinese firms. However, the recently signed Agreement on Reciprocal Trade (ART) between Washington and Jakarta, despite uncertainty over its legal footing following a US Supreme Court ruling, has opened a potential pathway for Indonesia to draw closer to Western partners in mineral processing.
Analysts caution that the government must safeguard its reputation as a reliable and stable investment destination, including by honoring existing contracts with current investors. At the same time, they suggest that Jakarta should leverage the opportunity arising from the tug-of-war between Western countries and China over mineral supply chains, particularly rare-earth elements.
"If we were to enter into this trade agreement [with the US], Indonesia must remain faithful to existing contracts [...] We can't do anything [that would jeopardize them]," M. Habib Abiyan Dzakwan, a researcher at the Centre for Strategic and International Studies (CSIS), told The Jakarta Post on Mar. 6.
He argued that Jakarta must clearly convey to Washington what is feasible under its current legal obligations.
"We can pick and choose our priorities," Habib said, referring to the potential impact of a mineral trade agreement with the US.
He noted that the US dominates the copper market, while China holds a commanding position in nickel. "The question is which one we want to diversify into."
