Indonesia’s Abundant Gold Potential, Challenges and Opportunities Become Economic Driving Forces
Indonesia is known as one of the countries with the largest gold reserves in the world. Based on the latest data, Indonesia ranks fifth in global gold production, with areas such as Grasberg in Papua — located on Mount Ertsberg — being one of the main sources. In addition to Papua, gold mining activities are also spread across various regions, from Sumatra, Kalimantan, Sulawesi, to Maluku.
Although the national gold potential is very large, a number of challenges still loom. Infrastructure, technology, and quality of human resources (HR) in the mining sector are considered suboptimal. Quoting Dr. Ir. Syahrial Shaddiq in the April 15, 2025 edition of Bpost. the inability to improve these three aspects could hinder Indonesia’s efforts to maintain its position as one of the world’s leading gold producers.
“We need to create a friendly investment ecosystem so that investors feel comfortable investing their capital,” said Syahrial, a mining observer and Lecturer at FEB ULM.
From the regulatory side, Syahrial highlighted the complicated licensing process which often hampers the growth of the gold mining sector. He encouraged policy improvements and a more efficient bureaucracy to encourage the development of this sector. In addition, he emphasized the importance of collaboration between the government and the private sector in developing infrastructure and improving the competence of mining workers.
“The quality of human resources must also be improved through training and upskilling,” he added.
On the other hand, gold is also one of the investment instruments that is increasingly in demand by the public. In the last decade, the demand for gold bullion in Indonesia has continued to increase, especially during the pandemic, when people were looking for safe haven assets.
“The trend of increasing world gold prices has made people increasingly interested in investing in gold,” said Syahrial.
The domestic gold price itself is influenced by various external factors such as the rupiah exchange rate against the US dollar, global economic conditions, and interest rates. Syahrial reminded the public of the importance of understanding the risks and benefits of gold investment.
“When inflation rises, the price of gold usually also soars. This must be a consideration for prospective investors,” he explained.
The abundance of national gold reserves is a great opportunity for Indonesia to make the mining sector the backbone of the economy. However, this success depends on good governance, supportive regulations, and strengthening the quality of human resources.
“If these three things are fulfilled, the gold sector can really boost people’s welfare,” concluded Syahrial.
