The Ministry of Energy and Mineral Resources (ESDM) has revealed that Indonesia has yet to fully capitalize on its immense potential as a "treasure trove" of mineral and coal resources.
Irwandy Arif, the Special Staff to the Minister of ESDM for Accelerating Mineral and Coal Governance, disclosed that Indonesia possesses mineral and coal wealth estimated at a staggering US$ 4 trillion, or approximately IDR 62,500 trillion (assuming an exchange rate of IDR 15,600 per US$).
Notably, two-thirds of this total wealth is derived from the country's coal reserves. With such vast natural resources, Indonesia should be able to reap substantial benefits from its mining "treasures."
"The mineral and coal wealth is US$ 4 trillion, with two-thirds coming from coal. So, coal plays a significant role in generating the revenue we receive," Irwandy revealed during a seminar in Jakarta, quoted on Friday (15/3/2024).
However, Irwandy disclosed that in 2021, the country's revenue from the coal sector alone amounted to only US$ 47 billion, or approximately IDR 733.9 trillion.
"But in 2021, our revenue from coal was only US$ 47 billion," he added.
With this low return on equity (RoE), it can be said that the revenue generated from mining activities is still relatively low compared to the total domestic mining wealth.
"Considering this as an annual estimate, it means the Return on Equity is very small, around 1.2%," he emphasized.
According to data from the Ministry of ESDM, the Non-Tax State Revenue (PNBP) from the mineral and coal mining sector in 2023 reached IDR 173 trillion, higher than the 2023 target of IDR 146.1 trillion but lower than the 2022 figure of IDR 183.5 trillion.
The target for PNBP from the mineral and coal mining sector in 2024 is set at "only" IDR 113.5 trillion.
As Indonesia strives to unlock the full potential of its mineral and coal wealth, the government faces the challenge of optimizing revenue generation while ensuring sustainable mining practices and environmental protection. Striking the right balance between economic growth and responsible resource management will be crucial in realizing the true value of Indonesia's mining "treasures."