Jakarta Eases Mineral Exports Amid Trade Deal
The Indonesian government has announced a significant development in its trade relationship with the United States, agreeing to ease critical mineral export restrictions as part of a new reciprocal trade deal. This move comes after US President Donald Trump announced the agreement on social media, expressing his excitement about gaining easier access to Indonesia’s resources. The deal, which includes a reduction in US tariffs on Indonesian goods from 32 percent to 19 percent, is expected to benefit Jakarta by opening up its key markets. A joint statement from the White House confirmed that Indonesia would “remove restrictions on exports” for a range of industrial commodities, including critical minerals. However, a senior Indonesian minister has clarified that this relaxation of rules will not extend to raw ore. The policy of only exporting processed minerals, which was a cornerstone of former President Joko Widodo’s administration, will remain in effect. This distinction highlights Indonesia’s commitment to boosting its domestic processing and selling higher-value products.
Ore Export Ban to Remain in Place
Despite the joint statement and President Trump’s optimistic announcement, Chief Economic Affairs Minister Airlangga Hartarto has dismissed rumors that Indonesia’s ban on ore exports would be lifted. He clarified to reporters that the country will continue to export only processed minerals, a policy that has been in place for unprocessed copper ores since early 2025 and for nickel since 2020. This firm stance is aimed at encouraging domestic metal processing, allowing Indonesia to capitalize on its rich natural resources by selling value-added products. This is particularly relevant for copper, a key material for electric vehicles and electronics, and nickel, which is a mainstay in battery production. While the US holds a significant amount of copper reserves, its smelting and refining capacity is currently lagging behind other nations, making it reliant on foreign sources. Indonesia, being the world’s largest nickel producer and a major copper miner, is leveraging its position to ensure its trading partners support its domestic industry.
Negotiations Continue on Trade Technicalities
Following the White House’s announcement, the Indonesian government is still in the process of finalizing the technical details of the agreement. According to Airlangga’s spokesman, Haryo Limanseto, both countries are set to negotiate and finalize the reciprocal trade agreement for signature. Haryo explained that the government is drafting a response to the White House’s announcement and aims to clarify the details as soon as possible, though he acknowledged that the process is time-consuming. The spokesperson could not confirm whether the final agreement would be signed before the August 1 deadline, emphasizing the importance of ensuring that all aspects of the deal are clear and mutually beneficial. This ongoing negotiation phase suggests that while the broad strokes of the trade deal are in place, the specific terms, particularly regarding which “restrictions” will be eased, are still being worked out.
