Indonesia’s Mining Industry in Global Production Networks: Linkages, Value Added, and Implications for Downstreaming

Abstract

Globalization has transformed the industrial structure into global integration known as the global value chain, including Indonesia’s mining industry. This study examines the integration of Indonesia’s mining industry into global production networks by analyzing forward and backward linkages and mining-sector value added using the Asian Development Bank Multi-Regional Input-Output database for 62 countries in 2022. This study uses an interregional input-output approach as an analytical tool The results reveal a predominantly upstream-oriented linkage pattern, indicating that Indonesia’s mining industry plays an important role as an input supplier to other sectors and economies, while its integration with upstream supplier industries remains relatively limited, thus Indonesia generates substantial value added from its mining sector, reflecting its significant economic contribution. The findings suggest that Indonesia’s key challenge is not simply to increase mining output, but to strengthen domestic linkages and value creation through downstream processing, technological upgrading, innovation, and domestic supplier development.