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
The revision to the Oil and Gas (Migas) Law is now being pushed through the House of Representatives at unusual speed, with lawmakers targeting completion by mid-October 2026 and hoping to conclude deliberations before the current sitting period ends. The pace is notable because the Migas Law revision was not originally included in this year’s national legislation program (Prolegnas), despite years of delays.
Members of Commission XII, which oversees energy and mineral resources, have described its acceleration as a response to shifting global geopolitics and the need to strengthen Indonesia’s domestic energy supply. Yet the speed of the process also raises a broader question: How much can the bill realistically resolve on such a compressed timeline?
The case for reform, however, has been building for years, particularly as the current administration places greater emphasis on energy security. National oil production has fallen from around 1.2 million barrels per day (bpd) in the early 2000s to approximately 700,000 bpd by 2015 and around 600,000 bpd in recent years. The prolonged decline has steadily increased the country’s reliance on imported crude and fuel, making a recovery in domestic production increasingly vital to energy security.
At the same time, the investment environment has become more challenging. The sharp decline in global oil prices, from around US$99 per barrel in 2014 to $52 in 2015 and then to $44 in 2016, significantly reduced the commercial attractiveness of exploration and development projects. The impact was particularly pronounced for Indonesia, where many fields are increasingly mature and therefore more costly and technically challenging to develop. Subsequent price volatility has added another layer of uncertainty, making it harder for both companies and the government to plan long-term investment and production.
This creates a fundamental policy tension. The government wants higher domestic production to reduce import dependence and strengthen energy security, while contractors make investment decisions based on expected commercial returns. When oil prices are low, the potential returns from exploration and development decline, even as the costs and risks of upstream projects remain substantial.
Indonesia’s regulatory framework therefore has to achieve two objectives at once: provide greater certainty for investors while ensuring that increased domestic production remains aligned with the country’s energy security goals. The draft Migas Law revision seeks to address part of this challenge through a major institutional restructuring. The bill would establish a special oil and gas business entity, dubbed BUK Migas, to assume the current functions of the Upstream Oil and Gas Regulatory Task Force (SKK Migas).
In the version now under discussion, BUK Migas would have authority over work areas nationwide, manage upstream operations and report directly to the President rather than through the Energy and Mineral Resources Ministry. Lawmakers argue this structure could reduce bureaucratic layers and streamline decision-making.
Yet the relationship between BUK Migas and Pertamina remains among the bill’s most contested issues. Some have pointed to Malaysia’s Petronas and Saudi Arabia’s Aramco as models for closer integration between the upstream authority and the national oil company. The argument is that greater coordination between regulatory and operational functions could strengthen the state’s ability to develop resources and boost production.
Energy ministry officials and lawmakers, however, have so far described BUK Migas as a distinct institution accountable directly to the president. Institutional restructuring could provide greater clarity over who has authority, including over production sharing contracts, thereby removing some of the uncertainty that has discouraged long-term investment.
But clearer institutional arrangements do not automatically alter the underlying economics of upstream projects. Contractors will still weigh expected returns against exploration costs, geological risks, field maturity and global oil prices.
