Indonesia must immediately prepare for the development of the copper industry, said Djoko Widajatno, Deputy Executive Director of the Indonesia Mining Association (IMA), in response to the 50 percent tariff plan on imported copper recently announced by US President Donald Trump.
Copper prices immediately surged to historic highs, causing ripples in the global market. Within a day, copper prices rose 3.58%, reaching a level of US$5.676 per pound, equivalent to about US$12,510 per ton.
Bank of America even projects prices to touch US$5.44 per pound by 2026, while the International Copper Study Group predicts global consumption this year will reach 25.88 million tons.
"The solution is the readiness of industrial development needs to be realized immediately. Making the tools needed for self-reliance starting from the food security industry, to the high end industry, from health to equipment for modern warfare," Djoko told Suar. Suar.
According to him, the concentrate export levy is not just a tax, but a policy tool:
- Forcing the realization of copper downstream
- Reducing dependence on raw exports
- Increase domestic added value
However, he admits that for miners, this could be a short-term burden if not accompanied by downstream readiness or other technical policy flexibility.
Export data from the Ministry of Trade's Satudata shows that from January to April 2024, Indonesia exported US$2.26 billion worth of copper ore and US$781 million worth of copper products and derivatives.
According to the Association's data, during 2022-2023, 97% of copper ore exports flowed to Asia with Japan being the main destination country with 760 thousand tons, China (680 thousand tons) and Korea (530 thousand tons). The rest of the copper ore exports flowed to Taiwan, India, Malaysia and Europe.
Meanwhile, copper mining operators, such as Freeport Indonesia, have predicted this policy. PT Freeport Indonesia's parent company, MIND.ID, has taken anticipatory steps, with business to business cooperation.
"We know that the market will likely shrink and prices could be depressed. So our move is to strengthen long term contracts andreduce exposure to the spot market," said MIND ID Portfolio and Business Development Director Dilo Seno Widagdo at a press conference in Jakarta, April 17, 2025 as quoted by Warta Ekonomi.
Dilo emphasized that this strategy has proven effective in maintaining the country's mining industry holding revenue, while avoiding global market volatility. In addition to long contracts, operational cost efficiency is the main focus of each subsidiary entity under MIND ID.
No big impact
Economist from the Bright Institute, Muhammad Andri Perdana, said that Indonesia will not have a big impact on this tariff increase because Indonesia is not a copper downstream manufacturing country. "Indonesia is still concerned with other minerals such as nickel, so it is not included in the impact," he said.
The copper supply chain is a large complex network involving several stages from mining, processing to manufacturing and distribution.
Copper is a widely used metal for various industries, including construction, electronics and transportation.
Bhima Yudhistira Adhinegara, Executive Director of the Center of Economic and Law Studies (Celios) assessed that President Trump's policy regarding copper import tariffs was a wrong step. He said, instead of being profitable, this policy could actually backfire on the United States.
Because around 50 percent of Uncle Sam's national copper needs still depend on supplies from abroad. "This step could be a big mistake for the US, considering that half of its copper consumption is still sourced from imports," said Bhima.
Consequently, industrial sectors that use copper as a key raw material will be directly affected. Growing demand will put pressure on the existing supply chain to meet the demand.
He suggested that Indonesia needs to shift the focus of copper concentrate exports to other countries outside the United States, such as China, Japan and South Korea, which have been the main markets.
"The next strategy is to expand export access to alternative markets. With an almost certain spike in copper prices, Indonesia should not rush to open the import tap for raw copper," he said.
