JAKARTA(23.05.2024) – The Indonesian Ministry of industry (KEMENPERIN) has expressed support for the downstreaming effort of silica commodities, which have tremendous potential for development as raw materials for semiconductor and solar panel manufacturing. This sector has great potential as a key foreign exchange generator and employment provider.

Silica sand is a natural substance composed of tiny grains of silicon dioxide (SiO2). Silica sand is a key component in compounds like sodium silicate, silicon tetrachloride, and silicon gel. It is utilized not only as a raw material for cleaning products, but also in the creation of optical fibers. Optical fiber plays a vital role in modern communications technologies, including the internet and telephones. Silica sand is used as a base material to create optical fibers with high light transmittance.

According to data from the Ministry of Investment/BKPM‘s Mineral and Coal Sector Strategic Investment Downstream Roadmap, Indonesia has abundant silica reserves totaling 332 million tonnes spread across Sumatra, Kalimantan, Nusa Tenggara, Sulawesi, Papua and Java. Among all, Java Island has the largest silica reserves in Indonesia, at 175.9 million tonnes. Looking at it closely, this figure is enough to put Indonesia among the ASEAN countries with the largest silica sand reserves.

However, Mr.Ignatius Warsito, an expert member of KEMENPERIN in the department of Strategic Domestic Industrial Capacity, asserted that Indonesia has yet to achieve full optimisation of Silica particularly its use in the semiconductor industry, which includes the transformation of silica into silicon wafers  based on Solar Grade Silicon (SGS) and Electronic Grade Silicon (EGS). Silicon wafer production, according to Mr.Warsito, is anticipated to contribute to the self-sufficiency of the domestic photovoltaic (PV) module and semiconductor industries.

As a first step towards the downstreaming project, The Directorate of Cement, Ceramics, and Non-Metallic Minerals Processing Industries had held a Focus Group Discussion (FGD) at the Gumaya Tower Hotel in Semarang on Monday, September 4, 2023. Included in this meeting were experts in the field such as, Rizki Triana Putri, who is the Chair of the Consumer Electronics Team at the Directorate of Electronics and Telematics Industry (IET), Motoaki Nagamori, who is the President Director of PT Sumco Indonesia, and Aldrin Purnomo, who is the Logistics Director of PT Infineon Technologies.

The export of silica sand commodities from Indonesia to China ranks third, according to data sourced from the Observatory of Economic Complexity (OEC). In 2021, Indonesia commenced exporting 53,1 million dollars worth of silica sand to China. However, upon transformation into solar panels, the worth of this silica sand commodity may rise by 25x. This pattern illustrates the significant financial gains that Indonesia may achieve through the implementation of effective downstream policies that transform “simple sand” commodities into a variety of technologically advanced goods of immense value.

According to the Ministry of Investment/BKPM, cumulative downstream investments in silica are expected to total $45.74 billion by 2040, creating 202,261 new employment and adding $12.52 billion to the GDP. This amazing possibility will surely be identified if a defined and quantifiable long-term strategy is developed.

In order to ensure the independence of the photovoltaic module and semiconductor industries, the Ministry of Industry will begin drafting a policy action plan for downstreaming silica or quartz commodities this year, including a road map for silica downstreaming into silicon wafers between 2025 and 2035.Furthermore, the Ministry of Industry is expected to draft a regulation governing the road map.

The plans for downstreaming activities are part of President Joko Widodo’s economic growth strategy, which focuses on adding value to natural resources, digitising MSMEs, and promoting the green economy. Even though some of these tactics have been partially applied in Indonesia, their use is still deemed inefficient and unevenly distributed.

Indonesia has natural resource potential; however, success will be determined largely by government policies. It is critical to improve collaboration across varied stakeholders, including both public and commercial institutions. This strategic approach must be spearheaded by the Ministry of Investment/BKPM, which is in charge of accelerating, promoting, and optimising investment in key downstream areas. Indonesia may start and grow as a global technology leader in Southeast Asia by transforming “sand” into “gold” at any time.

Sourced from:

• http://ikft.kemenperin.go.id/pengembangan-hilirisasi-silika-jadi-wafer-silikon/
• https://money.kompas.com/read/2023/09/19/060800126/hilirisasi-silika-kemenperin–indonesia-bisa-jadi-pemain-industri
• https://mediaindonesia.com/ekonomi/614059/kemenperin-dorong-pengembangan-hilirisasi-komoditas-silika-bahan-baku-panel-surya
• https://www.cnbcindonesia.com/opini/20240130113239-14-510097/hilirisasi-investasi-strategis-komoditas-silika-ubah-pasir-jadi-emas#:~:text=Berdasarkan%20data%20dari%20Kementerian%20Investasi,2022%2C%20yakni%20380%20juta%20tpa.

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