Mining industry in Indonesia - statistics & facts
Indonesia has an abundance of natural resources, including a diverse range of essential metals and minerals. The country holds the world’s largest nickel reserves, along with substantial reserves of coal and other minerals. As of 2023, the GDP generated from mining and quarrying reached over two quadrillion Indonesian rupiah, nearly doubling over the past five years. In addition, the sector received about 4.7 billion U.S. dollars in foreign direct investment, highlighting its attractiveness to the global market. With such a significant contribution, the mining sector has a crucial role in Indonesia’s economy, making the nation one of the key players in the global mining industry.
Moreover, environmental issues such as greenhouse gas emissions from mining activities continue to become a concern that needs to be addressed. Mining operations still frequently lead to deforestation, water pollution, and land degradation that disadvantage the livelihood of the local population near Indonesian mining sites. These challenges emphasize the urgency to ensure sustainability in mining policies enforcement.
Key mining commodities
Indonesia is one of the leading producers of many minerals, including bauxite, copper, tin, and gold. However, among those, coal and nickel stand out as the country’s primary mining commodities, with Indonesia ranking as the third largest coal producer globally and accounting for half of the world’s nickel production. With its notable influence in the global nickel market, Indonesia also aims to compete in the electric vehicle (EV) industry by producing EV batteries domestically, which heavily rely on nickel as a key component.Export ban on raw minerals
To further benefit from its rich mineral resources and boost economic growth, the Indonesian government has banned the export of unprocessed nickel ores since 2020. With this policy, it is obligatory to process raw materials domestically before being exported, therefore increasing their value. Despite strong objections from the European Union, Indonesia has seen a significant economic impact from this regulation. The export values of nickel from Indonesia have notably surged since the ban, with the 2023 value reaching over five times the exports in 2021. Following nickel ores, the government plans to implement an export ban policy on other commodities, including tin and copper concentrates, that will come into effect in 2025.Challenges in the sector
Illegal mining activities have been among the most serious and persistent issues in Indonesia’s mining sector. This has caused damage to the environment and affected local communities by harming the economy. Thousands of illegal mining sites are spread across the provinces of Indonesia, leading to significant financial losses for the country.Moreover, environmental issues such as greenhouse gas emissions from mining activities continue to become a concern that needs to be addressed. Mining operations still frequently lead to deforestation, water pollution, and land degradation that disadvantage the livelihood of the local population near Indonesian mining sites. These challenges emphasize the urgency to ensure sustainability in mining policies enforcement.
