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.
View moreOther Sectors
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
The Finance Ministry and state asset fund Danantara are at odds over who controls dividends from state-owned enterprises (SOEs), exposing an unresolved question at the heart of Indonesia's new state-asset architecture. Before Danantara was created, SOE dividends were paid to the state and recorded as non-tax revenue. Under the new framework, Danantara manages the shares and assets transferred to it and can use returns from those assets for investment and capital injections. Part of its eventual profits is to be transferred to the state after provisions for investment risks and capital accumulation. The dispute therefore is not simply about whether the government can receive SOE dividends, but about when and through what mechanism those funds should reach the state budget.
The row began on Aug. 28, when then-finance minister Purbaya Yudhi Sadewa said that, following a limited cabinet meeting with President Prabowo Subianto, the Finance Ministry would channel Rp 120 trillion (US$6.76 billion) of SOE dividends into the state budget as a fiscal buffer. The figure followed the President's address to the House of Representatives two weeks earlier, when he projected dividends from Danantara-managed SOEs at Rp 200 trillion.
Three days later, Danantara chief operating officer Dony Oskaria said he knew nothing about the plan and referred reporters to chief executive Rosan Roeslani. Purbaya responded on Sept. 3, saying Danantara was resisting a transfer it had promised the President it would make. Rosan responded on Sept. 9, denying that such a handover had been discussed.
The disagreement comes as the fiscal outlook has become tighter. The 2026 budget deficit is projected to widen from Rp 689.1 trillion, or 2.68 percent of GDP, to Rp 734.3 trillion, or 2.85 percent. Total government debt rose from Rp 9.92 quadrillion in March 2026 to Rp 10.29 quadrillion at the end of June. New borrowing is expected to rise from Rp 775.9 trillion in 2025 to Rp 832.2 trillion in 2026, while spending is projected to increase from Rp 3.84 quadrillion to Rp 3.98 quadrillion to fund priority programs, food price stabilization, purchasing-power support, transfers to regional governments, disaster management and special autonomy funds.
The numbers help explain the Finance Ministry's interest in bringing more funds into the budget. But the legal structure created by Danantara makes the timing and form of that transfer less straightforward than under the previous system.
The Supreme Audit Agency (BPK), in its audit of the 2025 Central Government Financial Report, found that 40 SOEs contributed Rp 11.7 trillion in non-tax revenue to the state, while 16 SOEs placed Rp 131.4 trillion with PT Danantara Asset Management (DAM), Danantara's operational arm. Of the funds placed with DAM, Rp 79.9 trillion was recorded as Danantara dividends, while Rp 70 trillion was invested in PT Danantara Investment Management (DIM) and Rp 34.8 trillion was used for capital injections into SOEs.
The change in the flow of funds reflects Danantara's new position in the SOE ownership structure. Under Law No. 16/2025, the fourth amendment to the SOE Law, the state retains 1 percent of shares in SOEs as Series A Dwiwarna shares through the SOE Regulatory Agency (BP BUMN), while 99 percent of the Series B shares are held through Danantara. The arrangement separates the state's regulatory and controlling role from Danantara's role in managing the investment and corporate assets.
That distinction matters to the dividend dispute. Under the amended SOE Law, Danantara can manage dividends from the holdings and SOEs under its control and use the funds for investment. Its investment gains and losses are treated as Danantara's own before provisions are set aside. If it makes a profit, part of it is designated as state profit and transferred to the state treasury after provisions for investment losses and capital accumulation.
A separate provision in the newer regulatory framework adds another layer to the debate. Government Regulation (PP) No. 19/2026, which amends PP No. 10/2025 on Danantara's organization and governance, allows Danantara to establish different types of investment holdings. Article 29B distinguishes a commercially oriented investment holding from one established to support national development and public services, as well as a third category for other purposes approved by the President. DIM is assigned to operate the commercially oriented holding under Article 32B.
Article 31A deals specifically with the development-oriented holding, rather than Danantara's investment holdings generally. If that holding carries out activities to support national development, the state may provide it with a capital injection (PMN) from the state budget. The provision allows the injection to take the form of fresh funds, state-owned goods, state receivables from SOEs or other limited liability companies, and other state assets. The holding can also request such support through Danantara. Once it receives the PMN, the holding becomes a SOE designated as a fiscal instrument.
The resulting architecture leaves Danantara with a substantial investment role while preserving a route for profits to return to the state. The Finance Ministry, meanwhile, has an immediate fiscal interest in those funds as it manages a wider deficit and rising borrowing needs. The current dispute reflects the tension between those two functions.
