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
President Prabowo Subianto ’s administration has begun feeling the pressure of the global energy crisis, with state-owned energy company Pertamina raising prices for several unsubsidized fuel and liquefied petroleum gas (LPG) products. The move appears necessary to protect fiscal stability and Pertamina’s operations amid supply disruptions caused by the United States-Israeli war on Iran.
The US-Iran conflict has driven a sharp increase in global crude oil prices. West Texas Intermediate (WTI) crude futures rose from $67.02 per barrel on Feb. 27 to $112.95 per barrel on April 7. Both benchmarks declined following a ceasefire on April 8, with Brent and WTI falling to $94.75 and $94.41 per barrel, respectively. Meanwhile, according to the Energy and Mineral Resource (ESDM) Ministry, the Indonesia Crude Price (ICP) surged from US$68.79 per barrel in February to $102.26 per barrel in March, reflecting movements in global crude futures. From a pre-war level of $72.48 per barrel on Feb. 27, Brent Crude futures climbed to $118.35 per barrel on March 31.
Accordingly, PT Pertamina Patra Niaga, a subsidiary of state-owned energy company Pertamina, announced on April 18 that it would adjust prices for Pertamax Turbo, Pertamina’s research octane number (RON) 98 gasoline, as well as Dex and Dexlite, Pertamina’s cetane number (CN) 53 and CN 51 diesel products. The price of Pertamax Turbo increased from Rp 13,100 (US 76 cents) per liter to Rp 19,400 per liter. Dex rose from Rp 14,500 per liter to Rp 23,900 per liter, while Dexlite increased from Rp 14,200 per liter to Rp 23,600 per liter.
Pertamina Patra Niaga also raised prices for unsubsidized 12-kilogram LPG cylinders in Java, Bali and West Nusa Tenggara from Rp 192,000 to Rp 228,000 per cylinder, marking the first increase since 2023. Meanwhile, prices for unsubsidized 5.5-kg LPG cylinders in the same regions rose from Rp 90,000 to Rp 107,000 per cylinder. Prices in other regions will be adjusted based on distribution costs.
The ESDM Ministry reiterated the government’s commitment to maintain subsidized fuel prices until the end of 2026. However, it also acknowledged that a second phase of price hikes for other unsubsidized fuel and gas products may be necessary if crude prices remain elevated.
The Finance Ministry stated that maintaining fuel subsidies remains possible through budget reallocations from ministries and agencies, as well as the projected 2.9 percent fiscal deficit. The ministry also noted that the government has Rp 490 trillion in excess budget balances from the previous fiscal year that could serve as a buffer. According to its calculations, these reallocations would be sufficient to sustain fuel subsidies if crude prices average around US$100 per barrel in 2026.
However, that assumption remains risky. The 2026 state budget is based on an average crude oil price of just $70 per barrel, while state-owned Bank Mandiri estimates that every $1 increase in crude prices would add roughly Rp 10.3 trillion in energy subsidy and compensation costs. By comparison, every $1 increase in crude prices would generate only Rp 3.5 trillion in additional tax and royalty revenues. The government’s reluctance to raise subsidized fuel prices also reflects inflation concerns. For instance, every Rp 1 increase in the price of subsidized RON 90 Pertalite could raise inflation by 0.27 percentage points.
Pertamina’s decision to raise prices for selected unsubsidized fuel products appears unavoidable given the pressure on downstream operations. However, if the company is forced to raise prices across all unsubsidized products, inflationary pressure could intensify while increasing the fiscal burden as consumers shift to subsidized alternatives. With no clear end to the US-Iran standoff, broader fuel price hikes may ultimately become unavoidable.
