Indonesia's mineral and coal (minerba) subsector saw a significant investment surge, reaching USD 15.92 billion by May 2024. This marks a dramatic increase from USD 2.86 billion in May 2023, representing a year-on-year growth of approximately 455.38%. Notably, the investment for the first four months of 2024 has already surpassed the total 2023 investment of USD 7.46 billion. This substantial investment is driven primarily by Mining Business Permits (IUP), which accounted for 57.36% of the total, followed by Coal Mining Exploitation Work Agreements (PKP2B) at 32.53%, and Contracts of Work (KK) at 1.5%. The most significant increase occurred between March and May, peaking at USD 4.89 billion in March 2024. Gita Mahyarani, Acting Executive Director of the Indonesian Coal Mining Association (APBI), noted that this surge is largely due to investments in smelter construction. The coal sector is expected to continue growing, driven by spending on services and goods to support national production plans, including heavy equipment procurement.
Investment trends are expected to rise due to infrastructure development and workforce expansion. APBI estimates coal production in the first half of 2024 to be around 400.59 million tons, up 20 million tons from the first half of 2023. Coal mining companies are strategically maintaining investments by anticipating global market trends. Niko Chandra, Corporate Secretary of PT Bukit Asam Tbk (PTBA), stated that the company has allocated IDR 2.9 trillion for capital expenditures to support operations and strategic projects like the Tanjung Enim-Keramasan coal transport development. Similarly, PT Bumi Resources Tbk (BUMI) has projected USD 100 million in capital expenditures for 2024, while PT Adaro Energy Indonesia Tbk (ADRO) reported a net cash outflow of USD 205 million for Q1 2024, primarily for heavy equipment purchases and aluminum smelter investments.
