Production of selected mineral products in Indonesia 2022
In 2022, approximately 98 million metric tons of nickel ores had been produced in Indonesia. The mining sector has been one of the key sectors contributing to Indonesia’s economic growth over many decades.
Cost of minerals
Exploration spending has been stagnant for a number of years. Indonesian mining companies have shifted their attention from increasing production and development to cutting operational expenditure and focusing on easier-to-mine mineral deposits, while curtailing capital expenditure. Over a 13-year period, mine production of nickel in Indonesia increased by over six-fold. Global nickel supply is however likely to see an increase with the ongoing Indonesian nickel refinery projects and the restoration of permits for previously suspended nickel mines in the Philippines. Tin is seeing a price recovery as a result of raw material scarcity, leading to the shutdown of several Chinese smelters, because of Indonesia’s consistency in enforcing its export restrictions and also the depletion of major tin mines in Myanmar.
Employment in remote areas
The sector makes a significant contribution to Indonesia’s GDP, its exports, government revenue and employment. For instance, in 2023, the foreign direct investment in mining and quarrying in Indonesia amounted to approximately 4.7 billion U.S. dollars. It has also arguably contributed to the development of the many remote regions of Indonesia, as mining companies are the only significant employers in some of these areas. However, this was sometimes at the cost of the miners’ physical health and environmental destruction of Indonesia’s remote areas.
