This year, the Indonesian mining industry is facing dynamics that are quite challenging and full of opportunities. Data from the Central Statistics Agency (BPS) shows that the mining sector will experience a contraction of around -0.66% throughout 2025, making it the only sector that has negative growth amidst national economic growth which remains above 5%. However, on the other hand, the contribution of this sector to the economy is still very significant, with the value of mining GDP reaching more than IDR 246 trillion by the end of 2025, confirming its role as one of the main pillars of the national economy.
However, behind this contribution, global and national mining industry trends are starting to show a shift. The decline in the export value of mining commodities to around 6.6% in 2025 as well as fluctuations in commodity prices such as coal and nickel are signals that this industry is no longer completely stable. So, what are the actual opportunities that are still open amidst these various challenges? What strategies does Indonesia need to prepare to maintain the competitiveness of the mining industry in 2026? Read more below!
Achievements of the Indonesian Mining Industry in 2025
- Oil Production Approaches National Target
Average oil production reached 602,400 barrels per day, or around 99.5% of the 2025 APBN target. - Oil Performance Remains Stable Above 95% Target
A report from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that oil production reached 579,300 barrels per day (95.8%). - Gas Production Exceeds APBN Target
Gas production reached 1.199 million barrels of oil equivalent per day, or 115% of the target, becoming one of the best achievements in recent years. - Coal Production Continues to Increase
Until semester I-2025, coal production reached 357.7 million tons or 48.34% of the annual target. - DMO Policy Increasingly Strengthened
Target Domestic Market Bonds (DMO) 2025 will reach 239.7 million tonnes, higher than previous years.
Challenges of the Indonesian Mining Industry 2026
Entering 2026, the global mining industry is in an increasingly complex transition phase. According to EY’s report on Top 10 Risks and Opportunities in Mining 2026the industry is facing a shift from strategic risks to more tangible operational risks, such as production complexity, cost pressures and global market uncertainty. In Indonesia, this dynamic is increasingly felt along with the push for downstreaming, demands for sustainability, and changes in government policy. Here’s the explanation:
- Increasing Operational Complexity
The complexity of mining operations is a major problem in Indonesia due to a combination of geographical challenges, weak licensing governance, the high number of illegal mines, and the accompanying social conflicts. - Cost and Productivity Pressures
The increase in operational costs and the need for efficiency means that mining companies must work more optimally amidst increasingly pressured margins.
- Price Volatility and Global Uncertainty
Fluctuations in commodity prices and global geopolitical conditions make market demand unstable and difficult to predict.
- ESG (Sustainability) Implementation Challenges
Environmental, social and governance (ESG) standards are now a key requirement for global market access, but their implementation remains a challenge for many mining companies. - Regulation and Legal Certainty
Tightening policies such as RKAB (Work Plan and Budget) and environmental obligations increase pressure on operations, especially for medium-scale business actors. - Limited HR and Digital Transformation
Industry faces the challenge of attracting new workers, while also having to adapt to technology such as AI which has not yet been fully implemented optimally.
Indonesia’s Strategy to Answer the Challenges of the Mining Industry
In facing various challenges in 2026, Indonesia will not just remain silent. The government and industry players are starting to direct strategies towards strengthening added value, increasing efficiency, and implementing sustainability principles. The following steps are being implemented by Indonesia:
- Encouraging Downstreaming and Added Industrial Value
Indonesia is strengthening downstream policies by limiting exports of raw materials and encouraging domestic processing. - Technology Optimization and Mining Digitalization
Mining companies are starting to adopt technologies such as automation, IoT, and AI to increase operational efficiency, reduce production costs, and minimize work risks in the field. - Strengthening Industrial Regulation and Governance
The government continues to improve policies such as the RKAB and production supervision to create industrial governance that is more transparent, measurable and sustainable. - Application of ESG and Sustainability Principles
Industries are encouraged to meet environmental, social and governance (ESG) standards to remain competitive in global markets while reducing the environmental impact of mining activities. - Human Resource Development and Workforce Competency
Improving the quality of human resources is carried out through training and technological adaptation, so that the workforce is able to follow the increasingly modern transformation of the mining industry.
Indonesia Energy & Engineering Series Balikpapan 2026: Momentum to Strengthen the Competitiveness of the Mining Industry
Amid the challenges and opportunities of the mining industry in 2026, collaboration and innovation are the keys to maintaining competitiveness. The transformation towards a more efficient, sustainable and technology-based industry encourages industry players to continue to adapt to global dynamics. This momentum is a strategic opportunity for Indonesia to strengthen its position as an important player in the world mining sector.
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Reference
Source: www.mining-indonesia.com
