Indonesia's FDI rises 17% in Q2, propped up by smelter investment
The rate was slightly faster than the annual FDI growth of 15.5 per cent in the first three months of 2024
FOREIGN direct investment into Indonesia rose 16.6 per cent on a yearly basis in the second quarter to 217.3 trillion rupiah (S$17.9 billion), bolstered by investment in the metal refining industry, the investment ministry said on Monday (Jul 29).
That rate was slightly faster than the annual FDI growth of 15.5 per cent in the first three months of 2024. The data excludes investment in the financial and oil and gas sectors.
In April-June, the South-east Asian country reported foreign investment worth US$4.4 billion in 1,130 projects in the base metals industry, the biggest beneficiary of FDI in the period.
Indonesia has seen rising foreign investor interest in its mining and metal refining industry since it banned exports of nickel ore in 2020 and other raw minerals in 2023.
Among the most notable investment in the second quarter was the completion of Freeport Indonesia’s copper smelter in East Java, Investment Minister Bahlil Lahadalia said.
More launches of FDI projects in metal refining are expected in the second half of 2024, he said.
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“In the car battery ecosystem, there will be a launch in cathode (factory) by LG,” he said, referring to an investment by South Korea’s LG Energy Solution in Indonesia’s Batang industrial estate in Central Java.
Indonesian President Joko Widodo last week said LG’s cathode plant is expected to start producing in September.
Bahlil said facilities at China’s Zhejiang Huayou Cobalt’s investment in the Weda Bay nickel industrial park in north Maluku will make battery precursor to supply Tesla from the start of next year.
The minister also hoped the launch of the second phase of the Batang estate last week would boost FDI figures going forward. Jakarta has been marketing the industrial estate as a destination for companies seeking to relocate outside of China to diversify their supply chains.
The largest sources of FDI in the second quarter were Singapore, China, Hong Kong, South Korea and the United States. REUTERS
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