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 administration of President Prabowo Subianto has issued Presidential Regulation (Perpres) No. 26/2026, which expands the role of public service agencies (BLU) in energy imports, blurring the traditional boundaries between government agencies, state-owned enterprises (SOEs) and private sector players. While the new regulation appears intended to strengthen Indonesia’s energy security amid growing global uncertainties, it could create overlapping responsibilities, increase operational risks and expose the country to greater geopolitical pressures.
Article 2 of the Perpres states that the regulation’s aim is to maintain good governance in the procurement of crude oil, fuel oil (BBM) and liquefied petroleum gas (LPG), whether sourced domestically or imported. It also seeks to improve the continuity, reliability and resilience of the national energy supply.
Under Article 4, imports of oil and gas products, including gasoline and LPG, may be conducted through agreements between Indonesia and foreign governments, cooperation between the government and foreign energy producers or partnerships between domestic energy companies and overseas suppliers, subject to certain restrictions.
Article 4 further stipulates that imports under bilateral cooperation schemes may be executed either by energy SOEs such as Pertamina or by the Oil and Gas Testing Center (Lemigas) of the Energy and Mineral Resources Ministry. It also authorizes the government to direct Lemigas to import oil and gas products to support strategic energy reserves and operational stockpiles.
During emergencies, Article 5 allows Lemigas and energy SOEs to independently procure oil and gas if domestic supplies are disrupted by geopolitical developments, price surges due to supply fluctuations or domestic reserves fall below established thresholds. The article also permits import contracts to include price differences based on volume, product type, country of origin and delivery schedules.
Meanwhile, Article 9 allows Lemigas, energy SOEs and private energy companies to import oil and gas products for storing in Free Trade and Free Port Zones (KPBPB) such as Batam or at bonded logistics centers (PLB). These facilities provide logistics and storage services while allowing deferred payment of selected duties, taxes and excise.
Granting Lemigas the authority to import oil and gas products marks a significant departure from the center’s traditional role. Historically, Lemigas has focused on research, certification, consulting, field surveys and testing services for the oil and gas industry.
The energy ministry says this expanded authority is intended to facilitate government-to-government (G2G) energy transactions, including potential agreements with Russia that could involve as much as 150 million barrels of crude oil.
Economists have argued that the new regulation risks creating overlapping procurement responsibilities between Pertamina and Lemigas, now designated as a public service agency. Assigning a commercial function outside the center’s core expertise could increase the risk of execution failures, complicate coordination in oil and gas procurement and distract Lemigas from its primary functions of research and testing.
Industry players have also suggested that granting import authority to Lemigas may serve as a way to bypass certain procurement restrictions Pertamina faces. The state-owned energy giant previously issued global bonds in the United States that restrict its involvement in illicit oil transactions, including purchases from countries such as Russia that are subject to sanctions by the US and its allies.
The energy ministry has acknowledged that facilitating such transactions is among the considerations behind the policy.
Meanwhile, National Energy Council (DEN) member Muhammad Kholid said the oil and gas that Lemigas imported could be stored at SOE-owned facilities, including those operated by Pertamina subsidiary PT Pertamina Patra Niaga or private energy companies. However, Kholid encouraged Lemigas to prioritize facilities run by SOEs, arguing that storage costs could be minimized through adjustments to asset use arrangements approved by the Finance Ministry.
Allowing Lemigas to import oil and gas products reflects the government’s concern over potential energy supply disruptions amid the country’s continuing dependence on fossil fuels. However, this policy should have been introduced earlier and tested through Pertamina before actually authorizing an institution with limited experience in commercial procurement.
Moreover, facilitating transactions involving sanctioned producers risks drawing needless scrutiny from Washington and its allies. It may also create a perception of foreign policy inconsistency following the significant concessions in Indonesia recently extended to the US.
