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 moreMining
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
Special climate and energy envoy Hashim Djojohadikusumo, President Prabowo Subianto’s younger brother, has revealed a proposal to distribute free smartphones to social assistance (Bansos) recipients, but Coordinating Economy Minister Airlangga Hartarto has denied its existence. The conflicting statements have raised questions about how the initiative came to be announced, particularly as the government pursues a separate program to open bank accounts for 200 million people.
Hashim announced the free smartphone plan on Oct. 13, presenting it as a way to help Bansos recipients access digital banking services and receive government transfers. He linked the proposal to the government’s broader financial inclusion agenda, suggesting that smartphones would bridge the gap between opening bank accounts and enabling recipients to use them.
Following the announcement, Airlangga clarified that the government’s current plan involved opening bank accounts for up to 200 million people, with an initial deposit of Rp 50,000 (US$2.76) per account.
The rollout is expected to begin in the fourth quarter of 2026, supported by a budget of around Rp 3.8 trillion. The program will be implemented through state-owned lenders Bank Rakyat Indonesia (BRI) and Bank Syariah Indonesia (BSI).
Airlangga’s denial leaves the status of the free smartphone proposal unclear and raises questions about whether it was properly coordinated with the government’s existing plans.
Hashim’s proposal initially seemed plausible because it addressed a practical challenge left unanswered by the mass account opening program: how recipients would access and use their new accounts. Providing smartphones alongside bank accounts could give recipients a direct channel for managing their finances and receiving social assistance, potentially reducing their reliance on intermediaries.
This apparent synergy, however, does not necessarily mean that distributing devices is the most effective or economical way to achieve financial inclusion.
Bundling smartphones and mobile data plans or phone credit with social assistance would introduce substantial logistical and financial costs. Large-scale distribution would require additional procurement, delivery and maintenance arrangements. Meanwhile, ensuring that recipients used the devices for their intended purpose would be difficult.
Compared with providing cash or enabling access through existing devices and banking channels, the proposal could impose significant additional costs without guaranteeing better outcomes.
There is also a risk that recipients could pawn or resell the phones to meet more immediate financial needs, undermining the program’s intended benefits. Similarly, phone numbers distributed alongside the devices could be transferred or sold to third parties.
These possibilities raise a broader question: whether providing hardware is necessary to expand digital access, particularly when the government could instead focus on ensuring that recipients can use existing devices to access banking services securely.
The risks extend beyond the devices’ potential resale. Mobile phone numbers have become valuable gateways to financial accounts and digital services, as they are widely used for identity verification and account registration. Distributing SIM cards or registered phone numbers on a large scale could therefore create opportunities for misuse, including the transfer of registered numbers to third parties or their exploitation in fraudulent activities.
This concern is particularly relevant to Indonesia’s efforts to combat online gambling, which is illegal along with all forms of gambling. Operators have circumvented restrictions by exploiting bank accounts and phone numbers registered under third-party identities.
A large-scale distribution program could expand the pool of accounts and numbers available for resale or misuse, potentially making enforcement more difficult. Without adequate safeguards, an initiative intended to promote financial inclusion could inadvertently create new vulnerabilities in the digital financial system.
Ultimately, both the mass account opening program and the free smartphone proposal reflect the government’s focus on populist policies. But the recent mix-up further amplifies concerns about policy coordination and consideration of potential risks and impacts.
The episode also invites scrutiny of the political motivations behind the government’s increasingly ambitious promises, particularly amid concerns over public approval ratings. If the administration is seeking to rebuild public support through programs that offer immediate, visible benefits, it risks political urgency taking precedence over planning.
