Draft Bill on Advanced Materials Targets Strengthening of Downstream Industries and Rare Earth Metals

Deliberations on the Draft Bill (“RUU”) on Advanced Materials are targeted to commence in 2027, following its designation as an initiative of the Regional Representative Council (Dewan Perwakilan Daerah –“DPD”). The draft legislation is intended to establish an advanced materials industry ecosystem, particularly by strengthening supply chains and developing the downstream sector.

Resvani, Chair of the Drafting Committee for the RUU on Advanced Materials, stated that the DPD had completed drafting the bill and submitted it to the House of Representatives (Dewan Perwakilan Rakyat – “DPR”), meaning that the subsequent deliberation process now falls within the authority of DPR.

“The draft was actually finalized several months ago and has already been submitted to the DPR. So, the ball is now in the DPR’s court,” Resvani told Hukumonline.

Resvani explained that the RUU on Advanced Materials is designed to regulate the supporting ecosystem to enable the advanced materials industry to grow and develop gradually. Unlike the Law on Mineral and Coal Mining (“Minerba Law”), which regulates the upstream mining sector, this RUU will focus on the development of downstream industries.

The aspects to be regulated include supply chain policies, data management, the provision of incentives, priority-setting, and industrial governance. The RUU will also contain provisions on rare earth metals as part of the development of the advanced materials industry, in line with the direction of government policy.

In addition, the draft legislation will regulate the division of roles and limits of authority among State-Owned Enterprises, the private sector, and specialized institutions, such as the Mineral Industry Agency.