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KN-JAKARTA, President Prabowo Subianto was asked about the agreement clause in the Agreement on Reciprocal Trade (ART) document between himself and US President Donald Trump regarding the need for Indonesia to open access to critical mineral mines for US companies. Responding to the question, Prabowo said that the clause does not mean that Indonesia opens access for US companies to absorb as much critical mineral commodities as possible and export them sustainably. This is because the government has regulations that limit the export of raw commodities. “We ask for raw materials to be processed, if he wants the mining process here, it will remain here, that is the basis for downstreaming, processing in Indonesia,” said Prabowo.
As 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 U.S. Supreme Court ruling, has opened a potential pathway for Indonesia to draw closer to Western partners in mineral processing. Analysts warn that the government must protect its reputation as a stable investment destination by honoring existing contracts while leveraging tensions between Western countries and China over rare-earth supply chains. M. Habib Abiyan Dzakwan of CSIS emphasized that Indonesia should clearly communicate to Washington what is feasible under its current legal obligations.
Nickel prices jumped after the world’s largest producer Indonesia agreed to tax outbound shipments of the battery metal. Futures climbed as much as 2.7 percent on the London Metal Exchange after Finance Minister Purbaya Yudhi Sadewa said President Prabowo Subianto had approved tariffs for coal and nickel exports. Discussions were still underway on specific tax rates, according to the minister.
Chinese investment in Indonesia’s nickel sector has exceeded $65 billion since the down streaming policy, boosting economic growth but raising concerns. Industrial hubs like Morowali and Weda Bay rely heavily on coal-powered smelters, threatening local communities’ land, water, and health. Environmental groups warn that without a shift in the industrial model Indonesia faces long-term ecological and emission risks.
Under Section 301 of the Trade Act of 1974, the United States has initiated investigation into 60 countries, including Indonesia, over their failure to ban exports of goods produced by forced labor. This shift requires urgent attention from the central government.
In 2024, the US Department of Labor (DOL) highlighted concerns about forced labor in Indonesia’s nickel industry, specifically indigenous rights on Halmahera Island in North Maluku. These concerns prompted the United Nations’ Committee on the Elimination of Racial Discrimination (CERD) to request additional information. Largely due to the sector’s rapid expansion, Indonesia is once again under the international microscope.
Indonesia ratified International Labour Organization conventions 29 and 105 on the elimination of forced labor in 1950 and 1957, and further integrated these standards into Law No. 13/2003 on manpower. Significant concerns remain regarding actual enforcement, however, and these doubts persist despite the training of labor inspectors, a pending business and human rights regulatory framework and an existing ban on raw nickel exports.
Glembert
