Effectiveness of Mineral Downstreaming Policy in Encouraging Regional Economic Transformation : A Case Study of RKEF And HPAL Integration In Obi Island, South Halmahera

Muhammad Djody Satriani

doi:10.61132/jupiter.v4i2.1351

Authors

Muhammad Djody Satriani PKBM Langgeng Ikhlas

DOI:

https://doi.org/10.61132/jupiter.v4i2.1351

Keywords:

EV Battery Supply, Mineral Downstreaming, Nickel Industry, Obi Island, Regional Economic Transformation

Abstract

Indonesia’s mineral downstreaming policy has become a strategic instrument to increase the added value of natural resources and strengthen the country’s position in the global mineral value chain. This study aims to analyze the effectiveness of the mineral downstreaming policy in encouraging regional economic transformation through the development of an integrated nickel processing industry in Obi Island, South Halmahera. The research employs a descriptive qualitative approach using secondary data obtained from government publications, corporate reports, policy documents, and environmental reports. Key data sources include regional economic statistics from the Central Bureau of Statistics, corporate publications from Harita Nickel, and regulatory frameworks such as Law No. 3 of 2020 concerning Mineral and Coal Mining. The findings show that the downstreaming policy has transformed Indonesia’s nickel industry by shifting export patterns from raw ore toward higher value-added products such as ferronickel and Mixed Hydroxide Precipitate (MHP), which are essential materials for electric vehicle battery production. The integration of Rotary Kiln Electric Furnace (RKEF) and High Pressure Acid Leach (HPAL) technologies in Obi Island has strengthened Indonesia’s role in the global battery supply chain while also stimulating regional economic growth in South Halmahera. However, the rapid expansion of the nickel industry also raises environmental governance challenges that require stronger regulatory oversight and sustainable mining practices. Therefore, future policy implementation should emphasize balanced economic development, environmental sustainability, and effective governance in mineral resource management.

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