August 15, 2023
JAKARTA – An impending ban on quartz sand or silica sand exports could jump-start rooftop solar panel manufacturing in Indonesia, industry observers believe.
Given Indonesia’s abundant resources with 25 billion tonnes of silica sand reserves and 331 million tonnes of ready-to-process silica sand, the government hopes a ban will prompt a rush into the production of silica-based products, including glass, ceramics and other building materials.
Silica is the primary constituent of most types of glass. The main form in which silica is found in nature is the mineral quartz, a hard, transparent crystalline material making up a substantial fraction of Earth’s crust.
President Joko “Jokowi” Widodo announced a plan to bar the shipments so as to derive more value from processing the commodity. Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan, who recently returned from China with a US$11.5 billion investment commitment from Chinese glass producer Xinyi Group, responded positively to the idea.
Indonesian Solar Energy Association (AESI) executive director Fabby Tumiwa said the ban could have a positive impact on the development of solar cell and solar module industries, as it would guarantee the availability of raw materials, including silicon dioxide, a raw material for both products.
Indonesia does not yet have domestic solar cell suppliers, Fabby explained.
“Solar module businesses import solar cells from [abroad], be it Taiwan, China or India. Then, the cells are assembled into solar modules. We don’t have [any domestic solar cell manufacturing facility] yet,” he told The Jakarta Post on Thursday, explaining that the silicon in solar cells was refined to reach metallurgical grade.
“Then it is processed into polysilicon, ingot and wafers, successively. These wafers are used to make solar cells and solar panels.”
Fabby went on to say that if implemented simultaneously with ambitious development plans for the silica processing industry, the restriction may make way for an integrated solar panel supply chain in Indonesia.
As of now, Indonesia only had a solar panel assembling industry, he said. “So, they import the solar cells, glass and other components. There’s no solar panel supply chain in Indonesia. […] Xinyi Group would be the first one to build an integrated wafer industry in Indonesia.”
Xinyi Group has pledged to develop downstream processing facilities for quartz sand, which Indonesia has in abundance.
The company holds 26 percent of the global glass market, according to Investment Minister Bahlil Lahadalia, who said in a press briefing on July 28 that Indonesia’s major quartz and silica reserves could offer huge potential for the company. He estimated that the deal would create some 35,000 jobs in Indonesia.
Xinyi previously invested some $700 million to build a glass factory in the Java Integrated Industrial and Port Estate (JIIPE), a special economic zone in Gresik, East Java.
Currently, Indonesia exports 20 percent of its total quartz sand, while the remainder is used domestically, according to Rezki Syahrir, an advisory board member of the Association of Indonesian Quartz Miners (HIPKI), who spoke in a live broadcast with CNBC Indonesia on Aug. 8.
But that 80 percent was only utilized for construction purposes, according to Arya Rizqi Darsono, head of the Indonesian Chamber of Commerce and Industry’s (Kadin) coal and mineral committee, while the small chunk exported was of a high purity grade.
“Domestically, no value is added by what we are doing with the quartz sand at the moment. What we are hoping is for it to be processed into semiconductors, so Indonesia needs to prepare the manufacturing facilities first, and then we can ban [quartz sand] exports,” Arya said in the same interview. “Don’t stop exports when the domestic industry is not mature yet.”
Silica sand is found naturally in several places worldwide, including India, Japan, China, Indonesia and Australia. High demand from glass and construction industries is driving the market growth in the Asia Pacific region, according to a 2023 report published by market intelligence publisher Fortune Business Insights.
The global silica sand market size is projected to expand with a 7.7 percent compound annual growth rate (CAGR) from 2022 to 2029, bringing the value of the sector to $18.98 billion by 2029, the same report reads.