Gold Demand Hits Record High, Production Capacity Seen as Needing Expansion

RRI.CO.ID, Jakarta — Global gold demand is climbing, requiring Indonesia’s mining sector to strengthen its domestic industry ecosystem. Industry observers say this must be achieved by significantly scaling up in-country precious metal processing capacity.

According to World Gold Council data, total gold demand in the first quarter, including over-the-counter (OTC) transactions, rose 2% year-on-year to 1,231 tonnes. Despite already-elevated gold prices, the volume growth is considered remarkably solid, with the surge in prices pushing the quarterly demand value up 74% to a record USD 193 billion.

Demand for gold bars and coins reached 474 tonnes, a 42% increase that marked the second-highest quarter on record. Asian investors were the primary driver, aggressively accumulating a wide range of gold investment products throughout the period.

State-owned enterprise observer and Director of the NEXT Indonesia Center, Herry Gunawan, noted that the rising demand for gold offers a significant dual opportunity for Indonesia. He emphasized that state-owned mining companies must take a more proactive stance by ramping up their production levels.

First, state-owned mining enterprises stand to capture greater profit from the price surge. Second, higher domestic production would help ease Indonesia's persistently deficit gold trade balance.

The urgency is underscored by Indonesia's position since 2021 as a net gold importer, a condition driven by domestic demand outpacing the country's export volumes.

"When demand for gold is high, it naturally becomes a positive sentiment for state-owned gold mining companies. It drives price increases, which makes boosting production critically important," said Herry in Jakarta on Monday, May 11, 2026.

On that front, PT Aneka Tambang Tbk (ANTAM), a subsidiary of state mining holding company MIND ID, has already taken concrete steps to expand output. The company has broken ground on a precious metal gold manufacturing facility in Gresik, East Java, with a planned annual capacity of up to 30 tonnes.

The new plant will complement ANTAM's existing gold coin production facility in Pulogadung, Jakarta, which currently operates at a capacity of 40 tonnes per year.

Within this supply chain, gold bullion is sourced from two primary channels. These include ANTAM's mine in West Java producing 1 tonne annually and PT Freeport Indonesia’s refinery, which processes anode slime into 50 to 60 tonnes of gold bullion per year.

Through this integrated industry supply chain, the Government, acting through the MIND ID Group, is working to reinforce Indonesia's bullion ecosystem. The strategic initiative aims to meet national demand for precious metal gold, currently estimated at around 70 tonnes per year and projected to grow further. (Annaila Azzahra/EN)