JAKARTA (Oct 15): Foreign direct investment (FDI) into Indonesia rose 18.55% in the third quarter from a year earlier to 232.65 trillion rupiah (US$14.94 billion or RM64.4 billion), the investment ministry said on Tuesday.

That compares with a 16.6% annual increase in the second quarter. The data excludes investment in the financial and oil and gas sectors.

FDI has been rising in Southeast Asia's biggest economy, particularly in the mining and metal refining sectors, since it banned exports of nickel ore in 2020 as part of the government's efforts to attract investors in the electric vehicle (EV) supply chain.

In the July-September quarter, the base metal industry received US$3.03 billion of investment, transportation, warehousing and telecommunication received US$2.02 billion, and mining recorded US$1.56 billion of investment.

"The main contributors of FDI came from the downstreaming programme," said Investment Minister Rosan Roeslani, referring to the government's efforts to attract investment in the processing of Indonesia's rich natural resources.

Singapore, Hong Kong and China were the biggest sources of FDI.

With investment from domestic sources, there was a total of 431.48 trillion rupiah of direct investment in the third quarter.

Examples of large investment in the period include the completion of copper smelters operated by Freeport-McMoran's Indonesian unit and local miner Amman Mineral Internasional, the minister said.

FDI launches by a South Korean firm and a Chinese company in EV battery making are expected, said Rosan, who was appointed as investment minister in August, without naming the companies.

His predecessor, Bahlil Lahadalia, said in July that South Korea's LG Energy Solution would launch its cathode factory in Central Java later this year, and China's Zhejiang Huayou Cobalt would start producing battery precursor in north Maluku next year.

Carmakers BYD an Stellantis have also each secured a tax break for their planned investment to produce EVs in Indonesia, Rosan said, without providing a timeline.

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