MINING AND ENERGY
The guideline of State policy underline that the development of mining
should be directed towards the optimum but thrifty use of mining deposits for
national development in the interest of the people’s welfare, by continuing to
maintain the conservation of environmental function, and to supply not only
the basic materials for domestic industries, but also for energy and public
needs. It is also designed to boost exports, augment state revenues and
regional income, and to expand business and job opportunities. The
development of energy should be aimed at securing the ever-increasing
demand for energy in social life as well as for economic activities and
development, in particular to meet the growing demand of industries and
services, proportionally to the phases of development growth.
The results and the progress of the mining sector during PJP l (First
25-Year Long-Term Development Period) constitute the strong foundation to
enter PJP II (Second Long-Term Development Period). The rapid
development of mining can be seen in the increase in production and export
of almost all kinds of minerals. A large number of these minerals are among
Indonesia’s export commodities, such as copper, bauxite and liquefied
During PJP I , PERTAMINA (State-owned Oil Company) has signed
177 contracts with private companies, both foreign and national. At the same
time, 1,504 wells were discovered comprising of 1,069 oil wells and 435 gas
wells. Crude petroleum production including condensated oil during the same
period had increased by 2.5% per year compared to that at the beginning of
PJP I namely from 219.9 million barrels (at the beginning of PJP I) to 563.1
million barrels (at the end of PJP I), and the production of the country’s oil
refineries went up from 72.3 million barrels to 294.8 million barrels.
The production and use of natural gas has risen by 23 times namely from 16
billion cubic feet (at the beginning of PJP 1) to 2,715.9 billion cubic feet (at
the end of PJP I). The use of natural gas has been increasing every year,
because of its being needed by fertilizer, steel and cement factories and in
hotels, restaurant and household, but also for the generation of electricity,
and at the end of PJP I had reached 94.0% or a rise from 59.9 billion cubic
feet at the beginning of PJP I to 2,509.3 billion cubic feet.
During Repelita V (since 1968/69 until 1992/93) production of LNG
(Liquefied Natural Gas) had increased by 6.2 % per year namely from 963
MMBTU to 1,301,181.4MMBTU. LNG exports in the same period had risen
by 5.8% per year namely from 962,200 MMBTU to 1,276,609.2 MMBTU.
Production of LPG (Liquefied Petroleum Gas) during Repelita V had
increased from 1,717.4 thousand tons to 2,805.4 thousand tons, meaning an
increase of 10.3% per annum and LPG exports which primarily went to
Japan, South Korea and Taiwan rose by 12.0% per year in the same period,
namely from 1,431 thousand tons to 2,525 thousand tons. During Repelita V
LPG marketing in the country had risen by 14.2% per year, namely from
240.5 thousand tons to 468.4 thousand tons.
Pursuant to the policy of diversification of energy sources efforts have
been made since 1974 to transform geothermal potential into another form of
energy. In 1993/94, the drilling of one exploration well and eight
development wells had been undertaken, so accumulatively the number of
drilling wells became 131 all of which to be used to generate electricity.
Until the end of Repelita V geothermal energy that has been utilized through
the operation of Electric Power Plants, driven by Geothermal Energy (PLTP)
from Kamojang (West Java), Gunung Salak, Dieng (Central Java) and
Lahendong was 199.5 megawatt.
Coal is a potential substitute for oil and natural gas, and for firewood
particularly in the rural areas. Therefore, high priority is given to efforts
involving exploration, rehabilitation and expansion, along with affording
wider opportunities to private investment, both national and foreign. Boosting
production and exports of coal during Repelita V resulted in an increase of
177 times, or from 159,9 thousand tons to 28,364.7 thousand tons thus
making Indonesia the third largest producer in the Asia-Pacific region, or the
19th biggest producer in the world.
Although the tin price at the world market has not yet improved
because of a quite large stock of world tin, but PT. Tambang Timah (Tin
Mining Company) succeeded in stepping up its export and competitiveness
through increased working efficiency, additional facilities and structuring, so
that Indonesia has been able to maintain its position as a foremost tin
producer in the world together with Brazil, China and Malaysia.
The production of tin during Repelita V had increased from 3.9
thousand tons to 30.4 thousand tons and exports of tin in the same period had
also rised namely from 16.9 thousand tons to 28.7 thousand tons.
Almost all of the production of nickel ore, ferronickel and nickel matte
are exported. Sluggish development of downstream industries and the low
demand for this mineral at home has caused the production of nickel to be
very much dependent upon international prices and marketing. Nevertheless
the production of nickel during Repelita V had increased from 261.9
thousand tons to 1,926.5 thousand tons, while exports of nickel in the same
period had risen from 240.5 thousand tons to 1,819.7 thousand tons.
Production of Ferro-nickel during Repelita V at the same time had increased
from 4,883.7 tons to 5,300 tons, or an increase of 1.8% per annum due to
optimum operation of a newly established factory and the expansion of the
factory in Pomalaa, South Sulawesi. Meanwhile exports of Ferro-nickel
during Repelita V had increased by 6.3% per year, namely from 4,258 tons to
5,800 tons. The production of nickel-matte in the same period had risen from
29,956 tons to 35,500 tons or an increase of 3.4% per annum, while exports
of nickel-matte in the same period rose from 28,621 tons to 33,100 tons or an
increase of 2.9% per year.
POMALAA NICKEL MINES AND FERRONICKEL SMELTING PLANT
Pomalaa is a small town situated at the Gulf of Bone, Southeast
Sulawesi Province, four hours drive from Kendari, the capital of the
province, or an hour flight from Ujung Pandang, the capital of South
Administratively it is under the District Administration of Kolaka,
some 30 kilometers away to north. Apart from nickel, it is noted for
production of cashew nut and honey
In 1909 a Dutch geologist named C. Abendanon discovered nickel ore
deposits in Pomalaa. Based on his reports, in 1934 Oost Borneo
Maatschaappij (OBM) and Bone Tolo Maatschappij started further
explorations. The samples they brought proved to have an average grade to 3
to 3.50% Ni.
After estimating a mining operation would be both technological and
economically feasible, the company started building infrastructure required.
All facilities and infrastructure were in place, and the company began tapping
the deposits. It took about three years, however, before the company could
see its first shipment of 150,000 tons of nickel ore to Japan in 1938.
When the Japan occupied the country, in 1942, Sumitomo Metal
Mining Company took control of the mine, and constructed a smelting plant
to process nickel ore into nickel matte. However, no single shipment of nickel
matte was made due to severe defeat to Allied Forces marking the end of the
World War II in 1945. The plant itself was severely leveled to earth.
After the Indonesian nation declared her independence in August 17,
1945, there were some foreign companies interested in exploring such a huge
reserve of nickel ore deposits in Pomalaa. These companies were among
others were Freeport Sulphur CO. from the United States , Oost Borneo
Maatschappij and MMC. But it was only since 1957 the mining could run
again when a private company, NV Perto, shipped the ready stock nickel ore
to Japan, and then in 1959 started mining nickel deposits in Maniang
When the issuance of Government Regulation No.29 of 1960 and
Mining Law no.37 of 1960, HV. Perto was nationalized and a company with
status of Limited Company was established and managed jointly by the
Central and Regional government. The company was named PT.
Pertambangan Nickel Indonesia (PNI). Later on with the issuance of
Government Regulation No. 22 of 1968 the Aneka Tambang State-owned
Company came into being to replace the previous General Executive Board
for Companies of State-General Mining. Since then Pomalaa Nickel Mining
Unit (UPN) has been placed under the supervision and control of Aneka
Tambang that changed its status into liability company (PT), bearing the
name PT. Aneka Tambang, pursuant to Government Regulation No. 26 of
PROCESS AND PRODUCTION
Wet ore mined at its about 7,500 hectare concession area from Gebe
island are blended to obtain a required composition before being dried at a
Rotary Dryer. From here nickel ore is mixed with lime stone and anthracite
before being delivered to rotary kiln to remove wet moisture and part of loss
of ignition contained in it. Hot calcite produced in Rotary Kiln is then
charged into electric furnace for being smelted. The crude metal, after being
tapped in a ladle, is mixed with Ca carbide and soda ash to eliminate the
sulphur contained in crude metal. After desulphurization process, the hot
metal then processed at the shaking converter into which the oxygen is blown
to oxidize the impurities such as Si, C and P ( desiliconization and
decarbonization process). The final products is in the form of ferronickel
ingot and shot.
The production of nickel ore and ferronickel during the fifth Five-Year
Development period (1989/90 - 1993/94) showed an increasing tendency. So
did their exports. In 1989/90 production of nickel ore totaled 429,345 tons, of
which 210,792 tons were exported. At the same time production of
ferronickel reached 4,963 ton, of which 4,732 tons were exported. While in
1993/94 the production of nickel ore reached 525,271 tons, of which 259,740
tons were exported, and that of ferronickel, meanwhile amounted to 5,266
tons, of which 5,431 tons were exported.
Ferronickel ingot and shot is produced by the Pomalaa Ferronickel
Smelting Plant having a total capacity of 5,000 tons per annum. The plant has
been in operation since 1976. PT. Aneka Tambang is now constructing
another plant, the Ferronickel Smelting Plant II, which will be in operation
commercially in the middle of 1995. With the operation of the new plant it is
expected that the production of ferronickel ingot and shot will see significant
increase to make the country world’s major ferronickels producing
To underpin all mining operations, production and export activities
there are available a maintenance shop for heavy equipment, construction and
electrical shops, shipping facilities, and shipdocking facilities.
The Pomalaa Nickel Mine and Ferronickel Smelting Plant employs
1,917 workers of miners, operators, and administrative personnel. Many of
them live in a housing complex equipped with public facilities such as
schools, a sport hall, golf court, houses of worships etc.
PT. Aneka Tambang is also very concerned with the preservation of
environment. Therefore, it has been very active in reclamation program by
revegetating and replanting the previous mined areas and unproductive soil
with suitable plants like cashew fruit, akasia and other local trees.
The program in fact, proved beneficial not only for the interest of
environment but also for the local people’s well being.
During RepelitaV, the production of copper concentrate showed an
annual increase of 26% namely from 302.7 thousand tons to 959.3 thousand
tons, and exports in the same period rose from 290.5 thousand tons to 944.3
thousand tons. Copper from the Gunung Bijih in Irian Jaya has been
processed into concentrate since 1922 by PT. Freeport Indonesia Company.
Production of copper concentrate has made headway after Freeport Indonesia
started getting copper through open-cast mining which is easier to handle and
reducing production costs.
GOLD AND SILVER
Production of gold, including that contained in copper concentrate
produced by PT. Freeport Indonesia Company during PJP I had increased
namely from 129.6 kg to 43,908.8 kg. At the end of Repelita V, exports of
gold had reached 41,224.4 kg, or an increase of 13.1% per year. Said
increase in exports which made Indonesia to become the 7th largest exporter
of gold in the world, was in consequence of the high price of gold at the
world market and the growing gold content in copper concentrate but also
because of Government’s policy that gold may be freely exported.
Development of gold reached 466.4 kg at the end of Repelita V, or an
increase of 8.2 per annum. Meanwhile the production of silver obtained
through the silver content in copper concentrate and several work Contracts
during PJP I showed an increased, namely from 9,855 kg to 88,902.6 kg.
All of the bauxite in Indonesia produced by PT. Aneka Tambang at
Bintan Island is designed to be exported. During PJP I the production and
export of bauxite showed an annual increase of 54.2% and 78.2%
respectively, namely from 879.3 tons to 1,338 tons and 847.7 tons to 1.371
tons respectively, all of which to be attributed to re-exports to the USA apart
from to those traditional countries as Japan and several European
Iron sand produced by PT. Aneka Tambang is designed to meet the
need of domestic cement factories. During Repelita V, production of iron
sand had increased from 164.9 thousand tons to 356.4 thousand tons or an
increase from 16.6% per year. Exports of iron sand to Japan has been
discontinued since 1979/80 because of reducing considerably its export from
The greater part of the granite stone produced from Karimun island,
Bangka Island, Belitung Island, and West Kalimantan are exported. The
production of granite stone during Repelita V rose by 41.9% per annum,
namely from 1,259.3 thousand tons at the beginning of Repelita V (1968) to
7,265.2 thousand tons at the end of Repelita V. Meanwhile the export of
granite stone in the same period went up from 776 thousand ton to 2,621.2
thousand tons, or an annual increase of 27.5%.
OTHER MINING PRODUCTS
Other mining products include manganese, yodium, sulphur,
phosphate, asbestos, kaolin, quartz sand, marble, felspart , calcite,
yorosite, bentonite, and gypsum which are and spread in various regions, thus
contributing to creating employment opportunities, expansion of enterprise
opportunities and development of regional mining potential generally carried
out by national private enterprises on a small-scale by cooperatives and small-
In keeping with development progress and economic growth utilization
of primary energy during PJPI had increased namely from 40.72 million
SBM (Oil Barrel Equivalent) at the beginning of PJP I to 449.10 million
SMB at the end of PJP I or an average increase of 10.1% per year
In the first PJP I the role of petroleum in development was very
conspicuous both as a source of energy and basic material for industry as
well as a most important source of foreign exchange receipts.
During PJP I in keeping with increased enterprising activities, the
production of petroleum went up though still being influenced by world
marketing and the quota imposed upon Indonesia by OPEC. Until the end of
PJP I the potential of oil resources was about 48.40 billion barrels and
potential reserves of 4.96 billion barrels.
During Repelita V, the use of petroleum went up from 179.05 million
barrels at the beginning of Repelita V (1968) to 262.25 million barrels at the
end of Repelita V (1993/94) or an annual increase of 8%.
The consumption of natural gas during PJP I rose from 4.74 million
SBM to 94.84 million SBM, or an average increase of 20 times per annum.
Greater availability of natural gas has resulted in a greater use of this source
of energy such as for newly built gas-driver power plants, the generation of
electric power and in transportation, while previous by it was used to meet
the need of forewood in industry and household. The greater use of natural
gas made the gas transmission network be also increasing namely from 330.5
km at the beginning of Repelita V to 652.5 km at the end of Repelita V while
marketing and distribution of gas rose by an average of 13.9% and 19.1%
The use of geothermal energy during Repelita V went up from 2.07
million SBM to 3.61 million SBM; its highest increase was in the last year of
Repelita V (1993/94) namely by about 80%.
|No.||Products||Unit||1968||End of Repelita IV (1988/89)||End of Repelita V (1993/94)|
|1.||Petroleum (Crude)2||million barrel||219.9||496.9|| - |
|2.||Natural Gas||billion cubic feet||116.0||1,887.0||2,715.9|
|5.||Nickel Ore||thousand tons||261.9||1,830.3||1,962.5|
|7.||Iron Sand||thousand tons|| - ||164.9||356.4|
|10.||Concentrated Copper||thousand tons|| - ||302.7||959,3|
Development of electric power is meant to support the development of
other sectors in an integrated and cooperative way.
During PJP I the supply of electric power showed an average increase
of 12.4% per year, namely from 616.6 MW at the end of PJP I. During
Repelita V, the construction of a number of electric power plants had been
completed with a total capacity of 4,603 MV.
Pursuant to the program of having electricity enter the villages, at the
end of Repelita V, 30,394 villages or 49% of the total number of villages in
Indonesia with a total of 9,071,679 consumers have been receiving
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