30 CHAPTER IV RESULT AND DISCUSSION IV.1 ANALYSIS STRATEGY PERFORMANCE In developing critical mineral industry in Indonesia, it is important to assure that every commodity extracted from the land are well-absorbed to the market to be further proceed and distributed. Some commodities, such as nickel, bauxite, and tin, already have refinery facilities in Indonesia. However, it has not yet attained an adequate scale to produce finished products; instead of producing semi-finished raw materials. This is a major issue for both company and the government as both parties strive to develop the downstream industry by ensuring that all stages of the process are performed in Indonesia in order to gain significant added value. Despite the government efforts, advancing the critical mineral industry in Indonesia to be the global market leader was experiencing lots of obstacles. Price volatility, technological advancement, human resources, energy resources, and inter- institutions synchronization are some constraints in this industry. Furthermore, geopolitical issues regarding the environmental and national protection issue will always be the main scourge. In this chapter, multiple analyses will be examined to generate the strategy for MIND ID. The major discussion will be about commercialization, global price setter, strategic partnership, and downstream industry. There are two main ideas will be examined in this research, first, will be the external analysis which include PESTLE, Porter’s Five Forces, benchmark, and market analysis. Second, internal analysis represents company analysis which will be conducted by examining the 31 Research-based View analysis. Further both of the results will be the input for doing the VRIO analysis to identify the SWOT. ANSOF Matrix will be applied to sharpen the strategy development. The result will be main strategy to be projected by assuming revenue growth rate. Finally, short-term initiatives will be suggested to MIND ID in achieving its objective on becoming the global market leader in critical mineral industry. IV.1.1 EXTERNAL ANALYSIS IV.1.1.1 PESTLE Analysis Politics Geopolitical condition become one of the most influence factor in critical mineral industry. Every country and union is attempting to preserve its own mineral resources and reduce its dependency on other countries, particularly those with enormous mineral reserves. Furthermore, the political identity among nations has a major influence on the global supply chain landscape. According to (Kondratiev, 2022), the global trend of transitioning to sustainable development is heavily reliant on the continuous supply of a variety of critical minerals. Therefore, it is important to establish collaboration among various stakeholders in the industry of critical materials management throughout the global supply chain. In this case, The United States is heavily reliant on the supply of critical minerals to support the manufacturing of high-tech products, which play a major impact in national security, renewable energy transition, and infrastructure. However, China, as the market leader in the critical mineral industry for consumer, producer, and even commerce, is currently concentrating on building an 32 assessment process for sustainable development of critical minerals, strengthening international collaboration, and promoting governance transformation to solidify its bargaining power in the global oversight of strategic and critical minerals (Wang, 2023). Refers to (Crochet & Zhou, 2024), The European Union is tent to reconstruct their financial mechanisms and utilizing international trade as a tool to capture supply while coordinating action plans along with allies through new cooperative mechanism. Countries such as the United States must have adopted the domestic policies and establishing partnerships approaches to counteract China's dominance in critical mineral industry. This involves encouraging local manufacturing and preventing foreign investment in critical mineral extraction. The creation of trade alliances, such as the Five Eyes Alliance, which includes the United States, the United Kingdom, Canada, Australia, and New Zealand, is a strategic initiative by the United States to assure a steady supply of critical minerals. These alliances assist to mitigate the risks associated with import dependency while also enhancing collective security among nations allied. Moreover, in 2022, US enacted the IRA regulation in order to mitigate climate change, strengthen energy security, and boost the transition to renewable energy. Basically, this protectionist regulation aimed to strengthen domestic supply chain and tariff policy for goods which coming from Foreign Entity of Concern (FEOC) and non-FEOC but affiliated in investment and/or operation such us energy supply, industrial estate utilization, and majority shareholding. Refers to (Federal Register 2024, n.d.), countries included in FEOC are China, Russia, Iran, and North Korea while non-FEOC countries are Canada, 33 Mexico, South Korea, Japan, Australia, Chile, Singapore, Peru, Columbia and Israel. By applying the IRA regulation, products from FOMC countries will not eligible to get tax incentives, thus will decrease its competitiveness in US domestic market. Tax incentive can only be obtained to countries producing their product in US jurisdiction or imported products with FTA (Free Trade Agreements). Meanwhile, European Union enacted the Critical Raw Material Acts (CRMA) to strengthen the supply chain in critical mineral among the regions. This implemented by doing the import diversification to decrease dependency to other countries, especially in terms of critical mineral supply. The EU establishes domestic production capability targets for each critical mineral in the CRMA to ensure that the supply of critical minerals from non-EU countries does not exceed 65% by 2030. The EU prioritizes sustainability; consequently, critical minerals that generate substantial carbon footprints will encounter substantial obstacles in accessing the EU market. However, Indonesia, as a major nickel producer with significant reserves of other critical minerals, is focussing on the use of electric car batteries, stimulating technical innovation and sustainable development. These geopolitical rivalry among majors countries, might be beneficial for Indonesia’s position by the increasement of price commodity. Meanwhile, Indonesia is perceived as being pro- China due to its the approval in establishing of critical mineral refining ecosystem in the country. In facts, MoEMR assessed that Indonesia requires investment to advance the downstream industry and is always committed to other countries foreign investment as long as it complies with existing laws. MoEMR also explained to 34 strengthen bilateral cooperation instead of alliances communication. This strategy will ease Indonesia’s position to gain more capitalization on the emerging trend and market. Finally, (Janardhan & Bhattacharya, 2024) assessing that the dynamic geopolitical landscape and increasing demand for critical minerals have highlighted the urgency in creating secure and resilient critical minerals supply chains, which forcing the governments to opt for reshoring, friend-shoring, and nearshoring manoeuvres in critical minerals trading. Economics Critical mineral industry has a high dependency on global macro-economic condition. As per September 2024, United States, Europe, and China economic condition are experiencing a high inflation which can directly impacted to the high cost of production, transportation, and lead to fluctuation of commodity price. Therefore, each government try to cut their interest to accelerate economic growth. According to the (IEA, 2024b), China's economy is transforming from an export and investment-driven model towards consumption and services based. However, this transition has not been smooth, and consumer spending has not completely covered the deficit caused by decreased export value and postponed infrastructure investment. Another major signal is that China owned high debt levels, mostly in the real estate industry. Over the past two decades, China's growing urbanisation has resulted in significant property trade.