18 Mining and Energy Downstream Projects Handed to Danantara, Major State and Private Firms Set to Benefit
Main Takeaways
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JAKARTA, Investortrust.id — Indonesia has handed over the pre-feasibility studies for 18 strategic downstreaming projects worth Rp618.13 trillion ($37.6 billion) to its sovereign wealth fund, Danantara, in a major push to transform the nation’s mining and energy industries.
The handover, conducted on Tuesday, is part of the government’s broader effort to accelerate industrialization in line with President Prabowo Subianto’s mandate. Twelve of the projects focus on mineral and energy sectors, including nickel and bauxite smelters, dimethyl ether (DME) plants, coal processing refineries, copper cathode production, and solar module manufacturing.
The Indonesian Downstreaming and Energy Security Acceleration Task Force, led by Minister of Energy and Mineral Resources Bahlil Lahadalia, conducted the initial feasibility assessments. The projects are expected to create around 300,000 jobs once fully developed.
BUMN and Private Firms Eye Danantara Financing
According to Liza Camelia Suryanata, Head of Research at Kiwoom Sekuritas Indonesia, state-owned enterprises such as PT Aneka Tambang Tbk (ANTM), PT Bukit Asam Tbk (PTBA), PT Pertamina Geothermal Energy Tbk (PGEO), and Inalum are well-positioned to secure priority funding or project concessions from Danantara.
“Danantara will provide financing through equity, syndication, or bonds—available to both state-owned and private companies. However, SOEs have an edge due to their institutional access and strong political backing,” said Liza in a research note released Thursday.
Among private players, PT Merdeka Copper Gold Tbk (MDKA), PT Amman Mineral Internasional Tbk (AMMN), PT Dian Swastatika Sentosa Tbk (DSSA), PT Harum Energy Tbk (HRUM), and PT Trimegah Bangun Persada Tbk (NCKL) are also seen as top contenders. Their eligibility is bolstered by reserve capacity, ownership of processing facilities, or partnerships with SOEs and foreign investors.
Liza highlighted MDKA and AMMN’s strength in copper downstreaming, HRUM and NCKL’s dominance in nickel, and DSSA’s growing portfolio in renewable energy. Should these projects become operational in the next 3–5 years, they could deliver significant revenue surges for these companies.
High Risk, High Reward
Still, Liza cautioned investors about the high-risk nature of these ventures, citing the capital-intensive nature of smelters, DME facilities, and integrated solar energy projects. Upfront investment often reaches billions of dollars, with additional risks stemming from technology demands, underdeveloped infrastructure, and potential construction cost overruns.
On the market side, oversupply risks for products such as cathode copper, aluminum, and slab could weigh on selling prices. To mitigate this, companies must secure offtake contracts and adopt long-term marketing strategies.
Environmental and regulatory hurdles also remain. Licensing delays, local community resistance, and environmental concerns frequently complicate large-scale project execution.
“SOEs benefit from Danantara’s financing and political cover, but private firms with strategic partners are also attractive due to generally more transparent governance and investor-friendly practices,” Liza added.
She urged investors to monitor key indicators such as capital expenditure reports, project feasibility updates, and partnership arrangements with Danantara.
Bahlil: Downstreaming Is the Only Way Forward
Speaking during the handover ceremony at the Ministry of Energy and Mineral Resources in Jakarta, Minister Bahlil Lahadalia stressed the urgency of Indonesia’s downstreaming agenda. The 18 projects were the result of extensive studies involving academics, stakeholders, and technology providers, he said.
“These projects are not perfect—that’s the nature of pre-feasibility studies. But Danantara has the resources to refine them further,” Bahlil explained.
The projects cover eight in mineral and coal downstreaming, two in energy transition, two in energy security, and six in agriculture, fisheries, and marine sectors. Notably, the battery ecosystem for electric vehicles is being developed under a separate initiative.
Bahlil also revealed that an additional Rp100 trillion ($6.1 billion) in investment for downstreaming—particularly in battery cell production—is expected to enter Indonesia by November 2025. This includes projects backed by investors from China and South Korea, further solidifying Indonesia’s ambition to become a global electric vehicle hub.
He emphasized that downstreaming is Indonesia’s best strategy to maximize value-added output and energy independence.
“We must stop exporting raw materials only to see other nations reap the benefits. If we keep doing that, how are we any different from the days of the VOC?” said Bahlil, referring to the Dutch colonial trading company.