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
Following the resignation of the Financial Services Authority (OJK) chairman and deputy chairman, the government has formed a selection committee to seek the best candidates to lead the OJK and restore investor confidence after market turmoil triggered by Morgan Stanley Capital International (MSCI)’s interim freeze of its February review of Indonesian stocks. The pressing question is whether any candidate will be capable of rebuilding market trust.
The selection committee, established on Feb. 9, is chaired by Finance Minister Purbaya Yudhi Sadewa and comprises eight members, including Bank Indonesia (BI) Governor Perry Warjiyo, Deputy Finance Minister Suahasil Nazara and several senior officials and experts. The committee has set relatively lenient eligibility criteria, requiring at least 10 years of experience in the financial sector and no criminal record. Politicians are eligible provided they resign from their political parties.
Several figures were rumored to be entering the race, including House of Representatives Commission XI chairman Muhammad Misbakhun and Suahasil Nazara, though both denied their involvement. While applications remain open until March 2, Purbaya has publicly expressed dissatisfaction with the quality of the applicants, noting that many have fallen short of expectations.
The selection process unfolds at a critical juncture. The stock market has slumped after MSCI temporarily froze Indonesia’s February market classification review and warned that the country could be downgraded from emerging market to frontier market status if governance concerns persist through May 2026. Such a downgrade could trigger capital outflows of up to Rp150 trillion (US$8.88 billion), according to one estimate.
At the heart of MSCI’s concerns is weak market governance, particularly the limited disclosure of ultimate beneficial ownership (UBO) because of complex corporate structures, especially among conglomerate-linked stocks. These stocks have long been suspected of engaging in market manipulation practices, commonly known as “pump-and-dump” schemes, which propelled the Jakarta Composite Index (JCI) toward the 9,000 level within a short span.
These concerns are reflected in unusually high price-to-earnings (P/E) ratios, signaling excessive valuations and elevated risk. For instance, shares of PT Chandra Daya Investasi - linked to conglomerate Prajogo Pangestu - reached a P/E ratio of 401 times. Following MSCI’s announcement, the JCI fell sharply from nearly 9,000 in late January to 7,922 on Feb. 2.
MSCI’s warning did not emerge overnight. Discussions over governance weaknesses have been ongoing since October 2025. Earlier this year, MSCI even offered the OJK a revised free-float calculation methodology tailored to Indonesia. In response, the OJK and the self-regulatory organizations (SROs) prepared measures to strengthen equity market governance, including improving UBO transparency.
Beyond MSCI’s warning, Purbaya had repeatedly urged the Indonesia Stock Exchange (IDX) and the OJK to tighten market discipline, curb manipulative practices and strengthen investor protection. In December 2025, he gave the OJK a six-month deadline to enforce discipline and sanction violators, later criticizing the IDX for responding too slowly to MSCI’s recommendations.
MSCI’s decision triggered a snowball effect. Shortly after the announcement, Goldman Sachs downgraded Indonesian equities to “underweight”, while UBS cut its rating from “overweight” to “neutral”. Soon after, Moody’s Investors Service revised Indonesia’s sovereign outlook from stable to negative, citing policy unpredictability and governance risks.
Domestically, political pressure intensified. Deputy House Speaker Sufmi Dasco Ahmad from President Prabowo Subianto’s Gerindra Party reportedly summoned OJK commissioners and urged them to take responsibility. Dasco was said to have suggested that several commissioners step down. Meanwhile, Defense Minister Sjafrie Sjamsoeddin, another close Prabowo ally, proposed legal action against OJK and IDX leaders. OJK and IDX leaders eventually chose to resign.
The OJK, now led by Friderica Widyasari Dewi as interim chair, serves as a pillar of Indonesia’s financial system stability, supervising banks, capital markets and nonbank financial institutions. Its independence is crucial to ensuring objective supervision aligned with stringent banking standards, including international benchmarks such as the Basel Framework. Political interference risks eroding regulatory credibility and further undermining investor confidence.
History offers a sobering lesson. Weak governance and financial oversight were among the factors that worsened the 1997–1998 Asian Financial Crisis, which ultimately toppled strongman Soeharto, then Prabowo’s father-in-law. A recurrence of such instability would carry severe economic consequences.
Given the erosion of investor trust, the OJK leadership selection process must be transparent, merit-based and free from political interference to produce candidates capable of restoring confidence among investors, MSCI and rating agencies. Failure to do so could deepen market skepticism, accelerate capital outflows and ultimately threaten financial system stability.
