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Full Article on Kompas.idMining & ESG6 min read
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Revealing Candidate's Thoughts on the Mineral and Coal Sector

Navigating Policy, Downstream Mandates, and ESG Frameworks in Indonesia

DI

Dr. M. Dhafi Iskandar

Mining & ESG Industry Consultant

Sep 2023
6 min read
Header illustration for article: Revealing Candidate's Thoughts on the Mineral and Coal Sector

The mineral and coal extraction sector represents the heartbeat of Indonesia's industrial output. As the nation defines its future economic policies, resource nationalism and downstream processing mandates (Hilirisasi) occupy center stage. The crucial query is whether our resources will remain a passive revenue object, or if they can serve as an active subject for long-term domestic prosperity.

Hilirisasi: Catalyzing Industrial Sovereignty

For decades, Indonesia functioned mainly as an exporter of raw mineral ores, leaving high-value secondary smelting and industrial output to overseas facilities. The ban on raw nickel ore exports represents a clear paradigm shift, demanding in-country processing and fostering structural development.

"Industrial maturity requires transitioning from commodity trading to advanced value chains. But this shift demands strict ESG parameters to guarantee long-term social and ecology health."

The Crucial Triad of Sustainable Extraction

For extractive practices to flourish in the international stage, three pillars must align:

  • Environmental Supervision: Advancing land reclamation and carbon-accounting in smelting facilities.
  • Social Alignment: Investing in local community development, clean water structures, and high-safety jobs.
  • Solid Governance: Establishing clear compliance indicators to combat illegal extraction.
Key Takeaway

By aligning domestic sovereignty goals with global ESG benchmarks, Indonesia can elevate its mining output from simple extraction to high-value, sustainable materials leadership.

Original PublicationKompas.id National Daily

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