Mining

Buffeted by volatile global commodity prices and legislative uncertainty at home, Indonesia’s mineral output has fluctuated considerably in recent years. The mining sector comprised 11.24% of GDP in 2013, down slightly on 11.8% in 2012, but an improvement on the 8.94% recorded in 2004. Coal contributed $26.64bn to domestic exports in 2013, followed by copper ore at $3.38bn, nickel ore at $1.88bn and bauxite at $1.39bn. Key importers of Indonesian coal include China, India, Japan and Korea, though the expected rise in domestic consumption is also likely to affect demand and production going forward, with several new coal-fired power plants set to be built in the coming years. In spite of challenges, the country’s vast potential resource still provide substantial growth opportunities. With mineral prices expected to stabilise as emerging economies increase their demand for the country’s raw materials, domestic and foreign mining outfits should find further incentive to continue exploration and development plans, provided uncertainty around the legislative framework is addressed. This chapter contains interviews with Martiono Hadianto, President Director, Newmont Nusa Tenggara; and Arsjad Rasjid, Vice-President Director and Group CFO, Indika Energy.