Sector

Mining

Indonesia, a country rich in natural resources, boasts a mining sector that is undeniably one of its leading sectors. With vast reserves of mineral and non-mineral mining resources, the country stands as a global powerhouse in the mining industry. As of 2022, Indonesia’s mining industry contributed Rp2.3 quadrillion to the national GDP, accounting for 12.22 percent.

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Mining

Indonesia, a country rich in natural resources, boasts a mining sector that is undeniably one of its leading sectors. With vast reserves of mineral and non-mineral mining resources, the country stands as a global powerhouse in the mining industry. As of 2022, Indonesia’s mining industry contributed Rp2.3 quadrillion to the national GDP, accounting for 12.22 percent.

Mining flourishes across various regions of the country, each contributing to the nation’s economy. It is present in regions such as South Sumatra, Riau, Riau Islands, Bangka-Belitung, Central Kalimantan, East Kalimantan, South Kalimantan, and North Kalimantan. Additionally, mining is also prevalent in Southeast Sulawesi, Central Sulawesi, West Nusa Tenggara, North Maluku, Papua, and West Papua.

Indonesia’s wealth of mineral resources offers a wide variety of materials available for mining. From abundant reserves of gold, bauxite, tin, and copper concentrates to nickel ore, the country’s rich mineral resources signify significant potential for economic growth and development. In addition, Indonesia is also rich in coal mining, with its abundant coal reserves catering to the energy needs of both domestic and international markets.

The country's mining sector thrives on these resources. In 2023, mineral resources such as bauxite reached a production of 28 million tons, gold at 85 thousand kilograms, tin concentrate at 57 thousand metric tons, copper concentrate at 3 million metric tons, along with nickel ore at 98 million metric tons.3 Meanwhile, Indonesia’s coal production reached 775.2 million tons in 2023, almost double than ten years earlier when coal production stood at 421 million tons.

Additionally, Indonesia is home to oil and gas exploration and exploitation, although its output has been dwindling. Once an exporting country of oil and gas, Indonesia has transitioned into a net importer of these commodities since 2008 when consumption surpassed outputs, which stood at around 1 million barrels per day (bpd). In the first semester of 2023, Indonesia’s oil output stood at 615 bpd.

Subsequently, the government has worked hard to reverse the trend of falling oil output and has set a target to restore oil lifting to 1 million bpd in 2030, alongside a gas production target of 12 billion standard cubic feet per day (BSCFD). As of January 2023, Indonesia’s documented oil reserves were 2.41 billion barrels, and its natural gas reserves stood at 35.5 trillion cubic feet.

As for investments, Indonesia secured US$30.3 billion for the energy and mining sector in 2023, marking an 11 percent increase from the previous year. That same year, the oil and gas sector led the way,

achieving US$15.6 billion in investments, followed by mineral and coal at US$7.46 billion, electricity at US$5.8 billion, and renewable energy at US$1.5 billion.

Latest News

November 6, 2026

Indonesia is facing mounting economic and diplomatic costs from forest and peatland fires this year as a prolonged dry season coincides with a strong El Niño and a positive Indian Ocean Dipole (IOD). The fires have caused widespread damage, placed a substantial burden on public health and economic activity and sent haze across national borders. The combined economic and health costs are estimated to have reached as much as Rp 123.1 trillion (US$6.79 billion), while the resulting pollution has strained relations with neighboring countries.

According to a study by CELIOS, economic losses from the fires in January-August 2026 are estimated to range between Rp 39.29 trillion and Rp 123.1 trillion. The upper-end figure is equivalent to 49.1 percent of the projected gross regional domestic product (GRDP) of Central Kalimantan this year, illustrating the scale of the potential damage and the economic stakes of avoiding seasonal fires from becoming an annual crisis.

The lower-end estimate comprises Rp 29.54 trillion in damage to physical assets and disruption to economic activities as well as Rp 9.75 trillion in healthcare costs. The final figure could be much higher if the fires continue to the year-end. Meanwhile, potential losses in local tax revenue are estimated at Rp 269.86 billion.

The government has allocated approximately Rp 1.2 trillion in emergency assistance to manage the fires and address related impacts, which has been distributed in two phases to affected provinces and districts. The first funding phase, worth Rp 760 billion, was disbursed on Sept. 7, followed by a second disbursement of around Rp 475 billion on Oct. 22.

The assistance is intended to support firefighting operations, evacuations, medical treatment for smoke-related illnesses, logistical supplies and postfire peatland restoration.

Industrial land clearing is a central cause of this year's fires, with environmental researchers pointing to deliberate burning for agriculture and plantations alongside decades of deforestation and peatland conversion.

Between January and July, 285,914 hectares of land burned nationwide, according to independent forest monitoring platform Nusantara Atlas. Around 23.9 percent of that area, or approximately 68,324 ha, fell within industrial concessions and includes 15,146 ha in oil palm concessions, 12,120 ha in mining concessions and 10,485 ha in pulpwood concessions.

Deliberate burning to clear land for agriculture and industry often allows fires to spiral out of control. The fires were further exacerbated by a prolonged dry season that left vegetation and peatlands unusually dry, which served as fuel for fires to spread beyond their initial land clearing sites.

Unlike surface fires, peat fires can persist below ground and reignite, requiring sustained efforts to extinguish them fully. Satellite monitoring revealed that in September, fires were burning both above and beneath the ground in peatlands, with underground fires likely to burn until sufficient rainfall returned to the country.

The fires have also become a source of diplomatic tension at a particularly sensitive time for regional cooperation, and ASEAN foreign ministers are expected to discuss transboundary haze ahead of the bloc’s annual summit in November. Smoke from the fires has spread from Indonesia into Singapore and Malaysia, exposing disagreements over the accountability of businesses operating across borders and the extent to which affected governments can intervene.

The dispute is particularly consequential for Singapore, given its close bilateral ties with Indonesia. The island country has been Indonesia's largest source of foreign investment since 2014, and its investments totaled Rp 230.46 trillion in the first nine months of this year alone.

Diplomatic friction intensified in October, when Singapore invoked its Transboundary Haze Pollution Act to hold accountable companies linked to the haze. Singapore issued preventive measure notices (PMNs) to Indonesian companies with concession areas linked to the fires, while separately requesting information from Singapore-registered businesses about corporate ties to Indonesian concession holders and their fire prevention efforts.

The two neighbors have since sought to prevent the dispute from escalating. On Oct. 27, Foreign Minister Arrmanatha Nasir and Singaporean Foreign Minister Vivian Balakrishnan met in Jakarta and agreed to establish a joint task force to share information, gather cross-border evidence and investigate companies linked to the fires. Nasir welcomed Singapore's offer to share corporate information and financial intelligence, while Balakrishnan said Singapore was prepared to pursue locally registered companies that were found responsible.

Indonesia’s recurring forest and peatland fires pose a threat not only to domestic economic activity and public health but also to its relationships with regional trading partners and investors. The substantial economic costs of the fires, combined with the risk of diplomatic friction over transboundary haze, demonstrate how environmental mismanagement can undermine investor confidence and complicate cross-border economic cooperation.

Although Indonesia’s wildfires have become a familiar feature during the dry season, their recurrence should not make them an accepted cost of doing business. Without sustained action to prevent deliberate burning to clear land, the damage risks compounding with each fire season.

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