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A strategic evaluation of Indonesia’s policy on mineral value addition

Author

Listed:
  • Andri Budhiman Firmanto

    (Institut Teknologi Bandung, School of Business and Management)

  • Dermawan Wibisono

    (Institut Teknologi Bandung, School of Business and Management)

  • Manahan Parlindungan Saragih Siallagan

    (Institut Teknologi Bandung, School of Business and Management)

  • Mohammad Zaki Mubarok

    (Institut Teknologi Bandung, Faculty of Mining and Petroleum)

Abstract

This study explores business stakeholder perspectives on Indonesia's mineral value-addition policy and identifies key factors influencing the country's competitive and comparative advantages in the mineral sector. Employing a mixed-methods approach, the research utilizes the Delphi technique for qualitative data collection and the Analytic Hierarchy Process (AHP) for quantitative analysis. The findings reveal that the primary determinants of competitive advantage, in order of importance, are: (1) firm strategy, structure, and rivalry; (2) basic factor conditions; (3) government policies; (4) advanced factor conditions; (5) chance factors; (6) demand conditions; and (7) related and supporting industries. For comparative advantage, resource endowment emerges as the predominant factor, followed by contribution to the global market. The study also highlights a significant consensus among business actors on the need for policy refinement to enhance value addition in the mineral sector. By applying the Delphi technique and AHP to assess factors under Porter's Diamond Model, this research enriches the existing literature and provides practical insights for policymakers and industry stakeholders. The findings emphasize the importance of targeted policy measures that optimize resource utilization and industry outputs, focusing on factors such as economic feasibility, policy consistency, and resource availability to improve competitive and comparative advantages in the global market. Future research could benefit from comparative studies with countries possessing similar mineral resources but different policy frameworks to identify best practices adaptable to the Indonesian context.

Suggested Citation

  • Andri Budhiman Firmanto & Dermawan Wibisono & Manahan Parlindungan Saragih Siallagan & Mohammad Zaki Mubarok, 2025. "A strategic evaluation of Indonesia’s policy on mineral value addition," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 38(2), pages 287-318, June.
    • Handle: RePEc:spr:minecn:v:38:y:2025:i:2:d:10.1007_s13563-024-00484-5
    DOI: 10.1007/s13563-024-00484-5
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    References listed on IDEAS

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