JakartaPost-Mar 25
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 US Supreme Court ruling, has opened a potential pathway for Indonesia to draw closer to Western partners in mineral processing. Analysts caution that the government must safeguard its reputation as a reliable and stable investment destination, including by honoring existing contracts with current investors. At the same time, they suggest that Jakarta should leverage the opportunity arising from the tug-of-war between Western countries and China over mineral supply chains, particularly rare-earth elements. “If we were to enter into this trade agreement [with the US], Indonesia must remain faithful to existing contracts […] We can’t do anything [that would jeopardize them],” M. Habib Abiyan Dzakwan, a researcher at the Centre for Strategic and International Studies (CSIS), told The Jakarta Post on Mar. 6. He argued that Jakarta must clearly convey to Washington what is feasible under its current legal obligations. He noted that the US dominates the copper market, while China holds a commanding position in nickel. “The question is which one we want to diversify into.” On Tuesday, the EU signed a free trade agreement with Australia to remove tariffs on almost all goods and potentially ease the bloc’s access to Australian critical minerals, amid concerns over China’s dominant position in rare earths and other critical minerals. Industry warns against disrupting nickel ecosystem under US trade pact Regarding the rare-earth metals supply chain partnership included in the ART with the US, Habib argued that Indonesia is a “new potential player” facing high barriers to entry, including dual-use regulations related to civilian and military applications, as well as high processing costs. “Indonesia must prioritize exploration and mapping. We still don’t have sufficiently sophisticated capacity to identify our rare-earth metal resources,” he said, urging a holistic approach that integrates foreign policy considerations to ensure the nation secures its position in the evolving global supply chain map. Read more at:
https://www.thejakartapost.com/business/2026/03/25/ri-urged-to-honor-contracts-keep-doors-open-in-mineral-tug-of-war.html?utm_source=(direct)&utm_medium=home_business.
