Jakarta. The government is being urged to improve the investment climate in the mining sector to make it more conducive. This is important considering that critical mineral commodities are being pushed to support downstreaming programs and bolster national energy security.

Critical mineral products are now projected to become a key pillar of the green industry ecosystem, particularly in supporting the production of electric vehicle (EV) batteries.

Vice Chairman of the Indonesian Energy and Coal Suppliers Association (Aspebindo), Fathul Nugroho, stated that mining business operators often face resistance when opening land, even though they already hold official permits from the central government.

"We also need support from local governments, starting with the creation of a conducive investment climate," said Fathul at the 2025 Mineral Energy Festival held at Hutan Kota Plataran, Jakarta, on Thursday.

According to him, companies holding mining permits typically carry out public outreach before opening concession areas. However, resistance often arises on the ground.

"Sometimes, when we want to open a mine that provides raw materials for the downstream industry, resistance movements already start during the initial outreach stage," he added.

Fathul emphasized that business operators comply with licensing regulations, ranging from mining business licenses (IUP) for exploration and production, to transportation and sales permits from the Ministry of Energy and Mineral Resources, as well as environmental impact analysis (Amdal) permits from the Ministry of Environment.

Aspebindo Chairman, Anggawira, stated that there are three main points linking ESG (Environmental, Social, and Governance) principles with investor interest in investing in the mining sector.

First, global investors are becoming increasingly selective regarding ESG. This can be seen from major financial institutions like BlackRock, the IFC, or sovereign wealth funds in Europe and the Middle East, which require ESG criteria as a basic investment prerequisite. In fact, green taxonomy and sustainability-linked financing have become the new norm.

Second, implementing ESG is said to reduce investment risks. For example, mining operations that do not meet environmental and social standards are more prone to social disruptions (loss of social license to operate), land conflicts, and legal litigation.

Third, the global commodity market is also ESG-oriented. For instance, markets in Europe and Japan have begun to set carbon standards for coal and metal imports. In the future, commodities without a low-carbon footprint or traceable origin may lose market access.

"Commitment to ESG in the mining industry is increasingly becoming a key factor in attracting investors, both domestic and foreign.

However, its impact is not as simple as a 'yes or no' decision, but rather selective and transformational," he added.

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