Downstream processing is considered to have successfully expanded the mineral value chain and created a new economic activity base, particularly in the areas where mining operations are located. One example is the development of batteries for electric vehicles and energy storage systems.
Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, said that the development of the battery industry in areas such as Morowali and North Morowali Regencies in Central Sulawesi has helped expand Indonesia’s national mineral value chain.
“If we look at Morowali, more than 75 percent of its economic structure now comes from the industrial sector. Previously, more than half came from primary sectors, such as mining and agriculture,” Faisal said at an event, as reported on Thursday, September 17, 2026.
He explained that more than 75 percent of Morowali’s economy is currently supported by the industrial sector. This differs from the previous situation, when more than half of the region’s economy came from primary sectors such as mining and agriculture.
A similar development can also be seen in North Morowali, as investment activity increases and mineral-processing industries expand in the area.
“This condition shows that downstream processing not only increases the value of commodities after they are mined, but can also establish a new economic activity base and transform the economic structure of producing regions,” he said.
Faisal said Indonesia’s nickel downstreaming during 2021–2022 was still at a relatively early stage, as processing largely stopped at products such as nickel pig iron (NPI) and ferronickel. However, nickel processing chains have increasingly developed toward higher-value-added products, including materials for the battery industry.
“But now we have reached batteries. This is something that I think deserves significant appreciation,” he said.
The transformation of the economic structure has also occurred alongside increased economic activity in nickel-producing regions. Based on data from Statistics Indonesia (BPS), per-capita GRDP in Morowali and North Morowali increased during the 2014–2024 period as mineral-processing activities expanded.
The next stage of nickel downstreaming is being directed toward the production of battery raw materials, including through high-pressure acid leach (HPAL) technology, which processes limonite ore into mixed hydroxide precipitate (MHP).
President Director of Indonesia Battery Corporation (IBC), Aditya Farhan Arif, said that the development of Indonesia’s national battery industry could also expand the economic impact of downstream processing to other mineral commodities beyond nickel.
He said that approximately 23 percent of the materials required for batteries consist of aluminum, while around 18 percent consist of copper. Therefore, establishing a domestic battery industry can create linkages with the industrial supply chains for these two commodities.
“If we have a sovereign, advanced, and self-reliant battery industry, we essentially also have an opportunity to gain an even greater economic impact from other commodities, not just nickel,” Aditya said.
IBC is developing the battery industry value chain, from battery materials to cells and battery packs, which can be used, among other applications, for electric vehicles and battery energy storage systems (BESS).
BESS are needed as energy-storage systems to support various electricity requirements, including those of data centers.
“These developments show that nickel downstreaming is not merely about increasing the value added of a single commodity, but also about establishing downstream industries, transforming regional economic structures, and creating linkages with the domestic industrial chains of other minerals,” Arif concluded.
