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
Since taking office President Prabowo Subianto has focused on uniting Indonesia’s political landscape by forming a broad coalition called Onward Indonesia, which includes nearly every major party. To secure their support, he has granted key roles in his government to coalition allies, ensuring they share influence. Notably, the Golkar Party, led by Energy Minister Bahlil Lahadalia, received eight cabinet positions, with half of those roles filled by ministers who also served under Prabowo’s predecessor, Joko “Jokowi” Widodo.
Jokowi appointed Bahlil the energy minister just before the latter took over the Golkar’s top post, which was left vacant by Airlangga Hartarto who abruptly announced his resignation in August last year. Bahlil was named the Indonesia Investment Coordinating Board (BKPM) head for his role in helping Jokowi win his second term in 2019. Later in 2021, Bahlil became the first investment minister following the reorganization of the BKPM.
Observers, however, cited Airlangga’s resignation as an alleged power play by Jokowi to embroil the coordinating economic minister in a corruption scandal, forcing him to resign, and thus allowing one of “Jokowi’s men” to take control over the party.
At the time of his rise to Golkar’s chief job, Bahlil came under heavy scrutiny due to his unpopularity within the party. But as the party’s creed dictates that it must side with the incumbent government, Bahlil’s election was non-negotiable.
The question now is whether Prabowo, as the new president, shares a common thought with Jokowi about Bahlil. On several occasions, Prabowo mocked Bahlil in public, albeit jokingly, but on the other hand, the President entrusts his energy minister to implement his ambitious downstream industry program.
As part of the Idul Fitri celebration, Bahlil paid a courtesy visit to Jokowi at his house in Surakarta, Central Java, on April 8, when Prabowo was away in Malaysia to meet Prime Minister Anwar Ibrahim to discuss joint measures in response to the steep import tariff rise imposed by the United States. Bahlil's visit, as well as that of several other cabinet members, such as Coordinating Food Minister Zulkifli Hasan, to Jokowi quickly fueled speculation about their dual loyalty. It remains unclear whether Bahlil and the other ministers had informed Prabowo in advance about their trips.
But one by one, the ministers publicly expressed their unwavering loyalty to Prabowo. Zulkifli, who also chairs the National Mandate Party (PAN), stated his and the party’s full support for the Prabowo administration.
Following PAN’s declaration, Bahlil asserted that he and Golkar would stand behind the Prabowo-Gibran administration “until the end”. Bahlil added that the backing will persist for as long as Prabowo wishes it to. “If he wants two terms, however many, we can discuss it. No problem. No need to doubt,” said Bahlil confidently.
Bahlil’s announcement came on the heels of a petition filed by a group of retired military officers with Prabowo, asking for the impeachment of Vice President Gibran Rakabuming Raka, Jokowi’s son, and the dismissal of ministers connected with Jokowi. Bahlil has unequivocally opposed the demands, saying that Gibran’s election was final and “constitutional”.
With Golkar under Bahlil publicly endorsing Prabowo’s reelection in 2029, it will mark the third consecutive presidential race in which the party has failed to promote its own candidate. The last time Golkar fielded a contender was in 2009, when former vice-president Jusuf Kalla teamed up with former chief security minister Wiranto. The pair finished last, trailing behind Megawati Soekarnoputri who partnered with Prabowo, and eventual winner Susilo Bambang Yudhoyono and his running mate Boediono.
Since then, the party has opted to play it safe and remain in government coalitions, with a brief stint as opposition from 2014 to 2016 after backing Prabowo during the 2014 elections. Rather than pursuing higher ambitions, the party has opted to maintain its steady presence within the established political power structure.
This time it is no different. Golkar’s decision to continue backing the administration is a show of both loyalty to Prabowo and an example of the art of survival to keep its ministerial seats and access to resources intact. Bahlil’s ongoing close ties with Jokowi may cast doubt on his true loyalty, presenting a political hurdle for Prabowo as he attempts to tighten his grip on power.
