This is in line with President Prabowo Subianto's strategy, which places mineral and coal sectors as part of foreign investment projects to support the economic growth target of 8 percent. How has the investment realization from this sector been achieved so far? What is the condition of the mining industry in Indonesia?

In addition to being capital-intensive and high-tech, investors are still facing various external challenges. It starts from the uncertainty in obtaining business permits up to different interpretations of the implementation rules or technical instructions.

According to the Energy and Mineral Resources Ministry, there are 883 Work Budget Plan (RKAB) applications filed by investors this year, 587 of which have been approved, and 121 rejected. Meanwhile, for mineral companies, out of 731 RKAB applications received and evaluated, 201 were processed, with 191 approved and the remaining 10 rejected.

Could this be one of the reasons why investment realization in the mineral and coal sector in the first half of 2024 only reached US$2.4 billion or 26 percent of the total target?

In the coal sector, investment can be boosted by downstreaming high-calorie coal to increase its domestic value. Foreign demand for this type of coal is increasing, as it is widely used to build steam power plants.

Steam power plants still use low or medium-calorie coal. The use of high-calorie coal is more efficient because its emissions are lower, and it is also more environmentally friendly even though the maturation process takes longer than low or medium-calorie coal. The price of high-grade coal has the potential to be processed to become metallurgical coal.