Gresik, East Java. Indonesia has begun construction of an integrated copper and gold downstream project in East Java, as Southeast Asia's largest economy pushes to process more of its mineral resources domestically and strengthen strategic industries.

State-owned mining holding MIND ID on Wednesday launched the project at the Java Integrated Industrial and Ports Estate (JIIPE) special economic zone in Gresik. The development is part of a broader rollout of 13 downstream projects under the government’s second-phase industrialization program.

The facility will process copper concentrate from gold miner Freeport Indonesia into higher-value products, including copper cathodes, precious metals, and components used in ammunition and defense systems.

Under the plan, copper cathodes produced at Freeport’s Gresik smelter will be further processed into brass mill products and brass cups by state-owned defense manufacturer Pindad, part of the DEFEND ID holding. The facility is designed to produce up to 10,000 tons annually.

Meanwhile, anode slime generated from the smelting process will be refined by state-owned gold miner Aneka Tambang, or Antam, into gold bullion. The precious metals refinery is projected to produce up to 30 tons of gold per year, equivalent to around 5 million retail units.

Tedy Badrujaman, director of downstream strategy and mineral ecosystem at MIND ID, said the project reflects Indonesia’s broader ambition to move up the value chain.

“This is a milestone that underscores Indonesia’s commitment to becoming a sovereign industrial nation,” Tedy said. “Downstream industry is not just about exporting raw materials but about creating high-value products domestically.”

The initiative is expected to strengthen the country’s industrial base from upstream processing to finished products, particularly in strategic sectors such as defense manufacturing.

The project is also seen as a major job creator. MIND ID estimates the copper downstream segment could employ up to 7,000 workers, while the gold refining facility is expected to add around 500 jobs.

Local authorities have voiced support for the development, citing its potential to boost regional economic growth and attract further investment.

East Java Vice Governor Emil Dardak said the JIIPE special economic zone is being positioned as a competitive industrial hub capable of drawing global players.

“We want JIIPE to have strong advantages, supported by infrastructure and a complete industrial ecosystem,” Emil said. “The presence of Freeport’s smelter has already created important raw materials like cathodes and anodes, which in turn attract downstream industries such as Pindad and Antam.”

The groundbreaking ceremony in Gresik was part of a nationwide launch led virtually by President Prabowo Subianto from Central Java.

Indonesia has made downstream industrialization a cornerstone of its economic policy, particularly in the mining sector, where export restrictions on raw materials have encouraged investment in smelting and processing facilities. By integrating copper and gold processing within a single industrial zone, the government aims to maximize value creation, reduce reliance on raw exports, and build a more resilient manufacturing base tied to its natural resources.