New Chapter in Indonesia’s Mining Industry Road Map

Indonesia is a country with the wealthiest mineral and coal resources in the world. From nickel, copper, bauxite, gold, tin, to coal, Indonesia has a very strategic position in the global industry supply chain.

Based on data from the Geological Agency, Indonesia has the biggest nickel reserve in the world with 42% portion of the global reserve. Indonesia also places in the first global ranking for tin reserves, fourth in the world for bauxite and gold, ninth for copper reserve, as well as sixth in the world for coal reserves.

For years, most of the economic value of the mining sector still concentrates on the sale of raw commodities, therefore this sector is very much influenced by fluctuations in global prices. This stagnant condition has caused the country no significant growth in income from the mining sector.

Not only that, the current mineral and coal reserves are natural wealth material whose number will not grow. Therefore its management must be wise for the development of the state’s economy.

In future, Indonesia needs an integrated development model of the mining industry which optimizes national mineral and coal wealth as a motor of sustainable economic growth, with higher added value, as well as creating wider benefits for the people.

The mining industry development direction should not only be on extraction activities, but also move towards strengthening the added value through domestic processing, development of downstream industry, expansion of global strategic partnership, as well as the integrated development of the industry ecosystem.

Such approach becomes even more relevant as the future of the mining industry is not only determined by the amount of reserves owned, but by the ability to change the reserves into products, technology, investment, and economic activities which bring bigger benefits for the nation.

MIND ID Division Head of Institutional Relations, Selly Adriatika, said that the national mining industry needs to enter a new chapter with the ability to present multiplying added value in order to boost the growth of Indonesia’s economy.

More so, as Indonesia has a big opportunity to transform from the commodity export country to an integrated industrial country using its own natural resources.

“The government has entrusted MIND ID to ensure that Indonesia’s mineral wealth is not only stopping at the extraction process. Such natural resources must become the industrialization foundation able to strengthen national economic structure and raise the economic independence of Indonesia.”

Selly explained that MIND ID or Mining Industry Indonesia, the Holding State-Owned Enterprise for the Mining Industry, is present as part of the efforts to open the new chapter and at the same time, respond to the stagnation of the mining industry development happening so far. Indonesia needs to strengthen processing to producing products and raw materials based on the needs of domestic industry.

At the same time, Indonesia also needs to strengthen the strategic partnership with various industry players and international investments to hasten technology mastery, as well as expand market access.

Moreover, the creation of the economic growth motor must be accelerated through the integration of various strategic mineral value chain. Therefore, the mining sector must become the most connected and mutually strengthening ecosystem.

In line with the clause 33 of the 1945 Constitution, in which the utilization of earth, water, and natural resources is for the prosperity of the people, the control of natural resource reserves is one of the mandate of MIND ID.

As the long arm of the government, MIND ID is present to create a more strategic control of natural resources, including the takeover of strategic mineral and coal reserves owned by foreigners, to maximize the benefits for the interest of the Indonesian nation.

“Our aim is not to stop at mining management. What we wish to create is how all of Indonesia’s natural resources can be optimized to strengthen economic sovereignty, as well as provide the biggest benefits for Indonesia,” Selly concluded.