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
Defense Minister Sjafrie Sjamsoeddin has confirmed that Chinese J-10 fighter jets are set to soar across Indonesia's airspace, ending months of speculation. While this procurement follows Indonesia's recent acquisitions of Rafale jets from France and fighter aircraft from Turkey, the Beijing deal has drawn particular attention for its speed and opaque timing.
Since President Prabowo Subianto took office last October, defense procurement has accelerated dramatically. The government has signed a deal for 42 Rafale aircraft worth an estimated US$8.1 billion and another for 48 Turkish combat planes, valued at around US$9.6 billion. Both agreements were widely covered as symbolic of renewed efforts to modernize the military's air fleet and strengthen bilateral defense ties with strategic allies.
Under the Prabowo administration, the country also looks set to revive its partnership with South Korea in developing KF-21 Boramae, a 4.5-generation fighter jet. The two sides have signed a revised Project Agreement on Joint Development for the country's continued participation in the KF-21 program, just days after Indonesia agreed to purchase KAAN jets from Turkey.
By contrast, the announcement on the procurement of China's J-10, reportedly for 42 aircraft, appeared without warning. Unlike the highly publicized French and Turkish deals, the Chinese agreement caught observers off guard, prompting questions about its strategic rationale and Indonesia's broader foreign policy direction. The obscure process signals a potential swing toward Beijing.
Indonesia's foreign policy underwent a significant shift immediately after the inauguration of Prabowo, who has made over 16 overseas trips and visited 24 countries in the first year of his presidency. His administration has loudly promoted its "free and active" foreign policy, refusing to enter any geopolitical bloc and welcoming any nation interested in striking a deal with Indonesia.
Under this same rationale, Prabowo pushed Indonesia to join BRICS, an intergovernmental organization that aims to counter the Western-dominated geopolitical order. This controversial move immediately raised questions: Is Indonesia moving freely and actively, or is the policy merely personal ambition disguised as national interest?
Known for his realpolitik views and Army background, Prabowo has emphasized strengthening military capacity to anticipate future threats in an uncertain international climate. This is reflected in his administration's defense budget of Rp 245.2 trillion (US$15 billion) this year and a projected Rp 335.2 trillion for 2026.
Prabowo's military-focused agenda, which began during his tenure as defense minister under his predecessor Joko "Jokowi" Widodo, has led him to strike deals with both Western and Eastern countries to purchase equipment to rejuvenate and modernize the Indonesian Military (TNI).
As defense minister, Prabowo largely favored deals with Western countries, signing major procurement contracts with France's Dassault Aviation (Rafale fighter jets and Scorpene submarines), the United States' Boeing (F-15EX fighter jets), Europe's Airbus (A400M transport aircraft), Italy's Fincantieri (FREMM-class frigates) and the United Kingdom's SMP (SRV-F Mk.3 rescue submersibles).
While these deals signaled Prabowo's preference for Western manufacturers, his recent pivot toward non-Western arms makers marks a sharp strategic departure.
Now, 42 Chinese J-10 jets are set to arm the Indonesian Air Force. Prabowo's defense procurement strategy targeting equipment from BRICS countries has piqued the interest of analysts, who view the move as part of Indonesia's shift to the East.
While this theory rings true, the greater concern is the logistical and technical challenges arising from this multisource procurement strategy. Purchasing defense equipment from too many different countries will add layers of complexity for the airmen tasked with operating and maintaining Indonesia's new, varied fleet.
Regardless of Indonesia's new defense engagements with China and Turkey, relations between Jakarta and Washington remain cordial, as evidenced by Prabowo's participation among world leaders at the Gaza Peace Summit in Egypt, which was convened by US President Donald Trump.
Though the two leaders have yet to hold a formal bilateral meeting, they appear to have a personal rapport. A hot mic incident during the Gaza summit captured a controversial exchange: Prabowo was overheard asking the US leader to put him in touch with one of his sons to discuss the advancement of the Trump family's business ventures in Indonesia.
Whatever the rationale behind the request, the incident underscored the friendly dynamic between the two leaders, hinting that Indonesia-US relations remain warm, even as Prabowo fields partners eastward.
