From a geological standpoint, Indonesia boasts one of the most attractive landscapes in the world: the Central Papua magmatic arc contains porphyry copper, gold and silver deposits; the Sunda Banda magmatic arc contains epithermal gold deposits; nickel, tin, copper and coal potential is huge. Indonesia is an advancing economic power. Yet despite vast reserves, the mining sector is still in its infancy. For all its diversity, Indonesia ranks in the top 10 global producers for only four minerals. Compared to Australia and Brazil’s production of around 20 metals, and Canada’s production of close to 30, Indonesia’s production of a mere 10 should give some hint of the potential that awaits.

Yet the regulatory framework governing exploration and extraction is not up to international standards. Apart from coal, mineral production has remained fairly stagnant. The 2009 Mining Act is often accused of being the main culprit behind the difficulties that the non-coal sector has been facing. Since its enactment, the number of foreign juniors in the country has shrunk considerably, causing a sharp decline in exploration spending. When compared to jurisdictions such as the Canadian province of Ontario, total exploration dollars in Indonesia are dwarflike, standing at $80 million spent in 2011 while Ontario exceeded $1 billion that year. With insights from government officials, coal producers, and mineral explorers, this report will provide readers with an impartial analysis of the industry at large.