Natural resources are elements or functions of the environment that occur naturally and hold economic value. They include raw materials, agricultural land, and components such as soil, air, water, and genetic diversity. Indonesia, the world’s largest archipelago, is made up of over 17 thousand islands spanned between the Pacific and Indian oceans. With its various land characteristics, tropical climate, and high levels of biodiversity, Indonesia is home to abundant natural resources that play a crucial role as the backbone of
Indonesia relies on its natural resources
The value of non-renewable resources is predominantly determined by their scarcity and exploitability for industrial use. This means that the natural resources that can be found on the territory of a state often shape the country’s position in the global economy and, thus, its political influence. Thanks to its geological location and large surface area, Indonesia is immensely rich in resources. It can produce a large
variety of minerals at a very high level. To a larger extent,
Indonesia’s gas and
oil reserves are increasingly used for its own economy. Therefore, among other reasons, the value of
crude oil and
gas exports from Indonesia has decreased over the past years.
Indonesia's oil and gas sector
Indonesia’s proven oil reserves totaled approximately 2.3 billion barrels in 2022, while its
crude oil production only amounted to around 0.2 billion barrels in the same year. As a vast archipelago, Indonesia often faces challenges in reaching and exploiting its oil and natural gas reserves across thousands of islands. Coal production, on the other hand, requires less complex and less expensive extraction methods, making it more economically valuable to Indonesia. The country’s strategic location that is close to emerging markets like India and China has further increased its
coal production and export in the past decades.
The mining sector is on the rise
Minerals are becoming increasingly important for a wide variety of industries, especially in the electronics sector. Since 2014, the Indonesian government has banned unprocessed mineral exports to promote domestic industries by processing raw materials within the country. The most important minerals found and produced in Indonesia are
tin,
bauxite,
nickel,
gold, and
copper.
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