JAKARTA: The government has laid out plans to map Indonesia’s rare earth element reserves as part of a wider plan to develop downstream rare earth industries.
Energy and Mineral Resources Ministry mining director general Ridwan Djamaluddin said that the ministry had identified eight locations that contained rare earth reserves, with plans to explore more areas up until 2024.
“All eight are still in the early exploration stage,” he told House Commission VII, which oversees energy and mineral resources, at a hearing in Jakarta.
Among the eight locations are Bangka Belitung, North Sumatra and West Kalimantan with rare earth mineral reserves amounting to roughly 207,397 tonnes, 19,917 tonnes and 219 tonnes, respectively.
As a comparison, China, the world’s largest rare earth miner, has a total of 44 million tonnes of rare earth minerals reserves.
Mapping rare earth reserves is part of the government’s bigger plan to develop downstream rare earth industries with an emphasis on the defence and renewable energy industries.
As many as 17 minerals are categorised as rare earth elements, which have a wide variety of applications, including in automobiles, consumer electronics and renewable energy power plants. They can be found in hybrid electric motors and generators, nickel-metal hydride batteries, diesel fuel, mobile phones, computer and television screens as well as optical lenses.
The energy ministry plans to conduct a more detailed exploration of rare earth reserves in several areas, including Ketapang in West Kalimantan, Sibolga in North Sumatra and Pegunungan Tiga Puluh in eastern Sumatra, by 2024.
Exploration efforts are currently carried out by state-owned tin miner PT Timah and private companies, including mining companies PT Mitra Stania Prima and PT Stanindo Inti Perkasa, according to Ridwan.
State-owned Bank Mandiri industry analyst Ahmad Zuhdi Dwi Kusuma said the domestic rare earths market would “sooner or later” grow alongside the development of the domestic renewable energy industry.
However, he noted that Indonesia-produced rare earths would face stiff competition from Chinese counterparts, which were much more readily available. Indonesia would need to specialise its rare earth production to gain a competitive advantage.
“There are many kinds of rare earths. These are essentially rare metals, they are useful, but not used in great quantities,” he told The Jakarta Post.
Global rare earth mine production is estimated at 280,000 tonnes in 2021, up 16% annually, according to the United States geological survey.
Processing raw materials into finished products could boost non-tax state revenue from the mining industry from an average of 40 trillion rupiah (US$2.78bil or RM11.7bil) per year to one quadrillion rupiah (RM294.42bil) per year, according to energy ministry estimates.
Indonesia kicked off its mineral downstreaming plans by enacting a landmark nickel ore export ban starting 2020 to force miners to develop nickel processing facilities.
Nickel can be processed into stainless steel and vehicle batteries. The government has similar export bans on bauxite and copper anode slime in the pipeline. The Industry Ministry is continuing work on a downstream rare earth industry road map that includes plans to conduct an inventory of domestic reserves, and restrict exports of certain products such as hydroxide and carbonate minerals.
“We see this as a very strategic issue,” said Taufiek Bawazier, the ministry’s director general of metal, machinery, transportation, equipment and electronics, at the same hearing. Indonesia needs to estimate the amount of rare earth elements reserves and to map which locations can be extracted to attract investments.” — The Jakarta Post/ANN
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