Contemporary coal dynamics in Indonesia

This paper explores the political economy of coal mining in Indonesia, and looks at how policy changes over the last few years might affect coal production and export. Indonesian coal production has risen dramatically over the last 10 to 15 years, and Indonesia has emerged as one of the world’s largest exporters of coal, and the largest exporter of steam coal. This expansion has been at least partly triggered by a chaotic growth in licensing of new coal mines, following the roll-out of Indonesia’s decentralization agenda. This rapid and unstructured expansion has created a raft of problems, including deforestation, rampant corruption, illegal mining, overlapping land claims, and resource “sterilization” concerns. Mining companies also are rarely rehabilitating and closing mines as required. All these issues reinforce the public’s perception that regulation of the mining sector is weak.