Jakarta. Indonesia must create a more supportive investment climate for the mining sector as the country races to boost critical mineral production for downstream processing and energy security, industry groups say.

Critical minerals such as nickel, cobalt, and bauxite are increasingly viewed as essential to building a green industrial ecosystem, particularly for the production of batteries for electric vehicles (EVs).

Fathul Nugroho, Deputy Chairman of the Indonesian Energy and Coal Suppliers Association (Aspebindo), said miners continue to face local resistance despite holding all necessary permits from the central government.

“We need support from regional governments, especially in promoting a conducive investment environment,” Fathul said during the 2025 Energy and Mineral Festival at Hutan Kota Plataran in Jakarta on Thursday.

According to Fathul, mining companies typically begin operations with proper public outreach, but often encounter protests even during the early stages of land clearing.

“Sometimes, even at the initial stage of socializing the project, we already face opposition in the field. Yet this is a source of raw materials for resource processing programs,” he said.

Fathul said that mining firms already comply with regulatory procedures, including holding mining business permits (IUPs) for exploration and production, transport and sales permits from the Energy and Mineral Resources Ministry, and environmental impact assessments (Amdal) from the Environment Ministry.

Separately, Aspebindo Chairman Anggawira said environmental, social, and governance (ESG) principles are now a key consideration for investors looking to fund mining projects. He outlined three key reasons why ESG matters more than ever in the extractive industries.

“First, global investors are increasingly selective about ESG compliance,” Anggawira said, citing examples like BlackRock, the International Finance Corporation (IFC), and sovereign wealth funds in Europe and the Middle East that now require ESG adherence as a baseline for investment. Green taxonomies and sustainability-linked financing are becoming standard.

Second, he said that proper ESG implementation can reduce investment risk. Projects that ignore environmental and social safeguards may face protests, land disputes, and legal challenges, threatening their social license to operate.

Third, ESG standards are now influencing global commodity markets. “Regions like Europe and Japan are introducing carbon standards for coal and metal imports,” Anggawira explained. “In the future, commodities with poor traceability or high carbon footprints may lose market access.”

“Commitment to ESG is becoming a decisive factor in attracting both domestic and foreign investment into mining,” Anggawira said on Friday. “But the impact is not as simple as a yes or no — it’s selective and transformational.”

Indonesia, one of the world's top producers of nickel and other battery metals, is pushing to become a global hub for EV supply chains. However, friction between regulatory goals and ground-level implementation continues to pose challenges.

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