Jakarta. Indonesia’s sovereign fund Danantara is in talks with the US International Development Finance Corporation (DFC) on a critical mineral investment, according to senior minister Airlangga Hartarto.

The announcement followed a US-Indonesia trade deal that could give Washington access to the latter’s copper and other minerals. The White House’s joint statement shows that Jakarta has agreed to lift its critical mineral export curbs in exchange for a major cut to the US’s looming reciprocal tariffs. Airlangga revealed Thursday that the deal would also see Danantara gaining a new international partner: the DFC. This is America’s development bank that focuses on investing in development projects in lower and middle-income economies.

“There are discussions between Danantara and the DFC to fund an investment in the critical mineral ecosystem,” Airlangga told a news briefing on the bilateral trade deal in Jakarta.

Airlangga did not go into detail about Danantara’s partnership with the DFC. Danantara also did not immediately respond to requests for comments. However, Airlangga said that Danantara had reached a deal related to the nickel-based battery materials with the French mining giant Eramet a few months back, alluding that the partnership with DFC might follow a similar pattern.

“Indonesia is open to investments, wherever they come from, including the US. The European Union had gained similar access via France's Eramet,” Airlangga said.

The DFC reported that its portfolio has surpassed $49 billion, spanning across 114 countries. According to its official website, the agency is also upfront about its intentions, saying that its critical mineral investments aim to counter China’s dominance. The DFC admitted it was concerned by how Chinese companies operated over 90 percent of the resource-rich Congo's critical mineral production. And so the agency unveiled a $553 million loan late last year to upgrade the Lobito Atlantic Railway, a vital transport route for such minerals. DFC said that the investment aimed to stop Beijing from securing a monopoly on critical minerals access and transit routes. 

Downstream sector development has been a centerpiece of Indonesia’s economic policy. The archipelagic country is developing its refining and manufacturing industries to be able to export higher value goods from its minerals, an ambition that China has taken a huge interest in.

In the first quarter of 2025, China invested $1 billion in Indonesia’s downstream projects, about 76.6 percent went to the mineral sector. Hong Kong put around $1.5 billion in such projects, of 99.1 percent of which revolved around minerals. This marked a huge gap compared to the $600 million that the US had poured in. About 98.5 percent of that American money had gone to helping Indonesia capture more value out of its minerals.

Over the past few months, Danantara has gained international partners left and right. The agency not long ago announced a $4 billion joint fund with the Qatar Investment Authority (QIA). Danantara and its Russian counterpart, RDIF, also agreed to set up a €2 billion or approximately $2.3 billion bilateral joint investment platform. Danantara has all government-run businesses, including its sub-subsidiaries, under its wings.

Not Ores, but Processed Minerals

Airlangga also once again clarified the critical mineral export clause in the joint statement. Indonesia has stopped exporting nickel and copper ores in a move to promote processing at home. Both minerals are key in battery production. The statement of Indonesia removing the export curbs sparked speculations that Jakarta would lift the ore sale ban, something that Airlangga had also previously denied.

“On industrial commodities, the form [of what we partner on] will not be ores, but in the form of industrial products. This is something that the US has done since 1967 through its Freeport investments, as they are producing copper cathodes. So what we will trade on is processed minerals,” the minister said.

Mining giant Freeport already has a smelter facility in Gresik, a plant that boasts an output capacity of around 650,000 tons of copper cathode. 

Securing high-value critical minerals has been a major focus for Donald Trump 2.0. A few weeks ago, Trump told White House reporters that Indonesia was “very strong in copper”. This was after he spoke with President Prabowo Subianto on the phone, a call that led to Trump slashing his reciprocal tariffs on Indonesian goods from 32 percent to 19 percent. 

The US relies on foreign sources for minerals as its domestic smelting and refining capacity still fails to meet its needs. When it comes to copper reserves, the US has a lead of 26 million metric tons when compared to Indonesia. Both countries mined an estimated 1.1 million metric tons of the red metal last year. Indonesia refined about 350,000 metric tons of copper in 2024, compared to the 890,000 metric tons in the US. The Southeast Asian country is the world’s largest nickel producer with an output of 2.2 million metric tons in 2024.