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The Role of Downstream Mining in Indonesia’s Economy during Pandemic
The Role of Downstream Mining in Indonesia’s Economy During Pandemic
Heri Prasetya | 12118045
COVID-19 pandemic takes place throughout the world, including Indonesia. There are many impacts it has caused, both indirectly, such as health, mortality rate, the need for facilities and infrastructure, and indirectly, such as economy, termination of employment, etc. It is undeniable that Indonesia’s economy has also reached negative or recession because of cumulative impacts of COVID-19 pandemic of various sectors. Many measures have been taken to solve the problems, including in mining sector. This time it will discuss the role of downstream mining in improving Indonesia’s economy which declines during the pandemic. In an activity, Minister of Energy and Mineral Resources (ESDM), Arifin Tasrif, said that
“Despite in the current pandemic, the mineral and coal (minerba) sector still played an important role in the national economic growth.
The minerba sector may also serve as the driver of community development and empowerment, especially around mining activity areas. With regard to mining sector, as one measure of recovering the economy during the pandemic, it is to increase investment in minerba mining sub-sector. Improved investment will be made through downstream mineral and coal commodities. In the future, there will be more companies with downstream minerba commodities, and there will be more mining products to be enjoyed by the public. The government keeps encouraging downstream mining to improve mining product’s added value. Downstream mining sector contributes relatively greatly to Indonesia’s economy during the pandemic. One form of downstream mining as an economic strengthening capital is downstream coal mining, such as one in South Sumatera. Downstream coal mining through gasification technology is believed to enhance South Sumatra’s economic growth which all this time relies on the coal mining sector. It is commonly known that PT Bukit Asam (Persero) Tbk is currently working on the coal to DME (dimethyl ether) project in Tanjung Enim, South Sumatra. The coal gasification plant will produce which will be a substitute or replacement for LPG. Coal commodity contributes to South Sumatera’s increasing export, with recorded share from 7.3% in 2012 to 20.3% in 2019. This was informed at the Dissemination of South Sumatera’s Economic Report event virtually on Thursday, 10 December 2020.
In Kalimantan, a cooperation agreement for Coal to Mehanol (CTM) project has been signed at Batuta Industrial Chemical Park in Bengalon, East Kutai. In addition, the government currently focuses on preparing renewable energy development program in support of green industry development. With developing downstream mining product in Indonesia, it is expected that the Indonesians will gain benefit and prosper.
> Mining Activities > Source : Pusat Studi Hukum Energi dan Pertambangan Coal Mining Activities Source : Kaltim Post
Despite in the current pandemic, the mineral and coal (minerba) sector still played an important role in the national economic growth. ”
The COVID-19 pandemic this year also strikes the mining sector, especially the coal industry. Discussion on downstream mining cannot be separated from the existence of Job Creation Law which reaffirms the Mineral and Coal Law. The law is deemed to give a bigger certainty to the mining sector, one of which is that it allows royalty 0% for business player who enhances (downstream) coal added value. Chairman of the Indonesia Mining & Energy Forum (IMEF), Singgih Widagdo, stated that the existence of Job Creation Law was quite positive for the economic recovery, particularly in mining sector. Through the Job Creation Law, the state may solve many mining problems, particularly related to stagnant downstream mining. In his opinion, this is deemed to accelerate coal serving as the economic booster instead of merely a revenue driver. Singgih believes that this may also accelerate manpower absorption. Besides, the form of downstream mining expected to bring positive impact on the Indonesia’s economy is downstream nickel mining, of which one of its uses is to be raw material for lithium battery for electric car. Coordinating Minister for Maritime and Investment Affairs, Luhut Binsar Panjaitan, revealed that on the period 2014 - 2019, non-vehicle iron and steel export increased from USD 1.1 billion to USD 7.4 billion. In addition, nickel ore to
stainless steel slab processing will give added value from USD 612 million to USD 6.24 billion. This is expected to increase the leverage of Indonesia’s economy to be better amidst the prolonged pandemic.
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