Indonesia Mining Sector Eyes Electrification to Build Resilience

RRI.CO.ID, Jakarta - Global geopolitical turmoil is increasing operational risks for mining companies, including those in Indonesia. Energy prices and supply have become critical issues that could pressure costs, cash flow, and business projections.

These conditions are pushing Indonesia’s mining industry to accelerate the electrification of its fleets and heavy equipment. The Indonesian Chamber of Commerce and Industry (Kadin Indonesia) views the energy transition as no longer a pilot initiative but a strategy to strengthen resilience amid global volatility.

Kadin Indonesia Deputy Chairman for Energy and Mineral Resources, Aryo Djojohadikusumo, said geopolitical turmoil can affect mining companies’ budgets and financial projections. Reliance on diesel, gasoline, and other petroleum products means fuel prices and availability directly influence cash flow and business continuity.

Aryo noted that mining companies are not only facing rising fuel prices due to global tensions but also challenges in securing fuel supply. These pressures require the industry to strengthen resilience against external factors that are difficult to control, including geopolitical shifts that affect energy markets.

Several mining companies have begun electrifying their fleets and heavy equipment as part of long‑term resilience building. Although electrification may require higher upfront costs, Aryo said the approach is preferable to continually facing uncertainty driven by external factors.

“There is no better way to build resilience and long‑term strength than to keep innovating,” Aryo said, citing electrification and artificial intelligence (AI) as innovations that can support the industry, at the Energy Insights Forum in Jakarta on Wednesday, September 9, 2026, as quoted by Antara.

Energy pressures are reflected in the 1.4 percent rise in Brent crude futures to USD 98.5 per barrel on Tuesday, September 8, amid heightened US–Iran tensions and concerns over oil shipments through the Strait of Hormuz.

In the same forum, Khoon Tee Tan, Managing Partner and Senior Partner at McKinsey & Company Indonesia, said the industry must continue innovating to strengthen resilience amid global volatility and shifting prices, tariffs, and regulations. He added that technological advancements now allow deployment in mines and smelters, including in remote locations.

“Technology is no longer a barrier but an enabler. The question is how we apply technology in a way that truly creates value for all of us,” Tan said.

He also noted that electrification opens opportunities to use domestic energy sources to support mining and smelter operations.

Global energy market uncertainty remains evident in early September. Brent crude futures rose 1.4 percent to USD 98.5 per barrel on Tuesday, September 8, driven by rising US–Iran tensions and concerns over oil shipments through the Strait of Hormuz.

Through state-owned electricity company PLN’s 2025–2034 Electricity Supply Business Plan (RUPTL), the government is targeting an additional 69.5 gigawatts (GW) of power generation capacity, including 52.9 GW from new and renewable energy (NRE) and storage systems. The plan also includes 47,758 kilometers of transmission circuits to strengthen the national electricity system.

In April 2026, PLN signed Power Purchase Agreements (PJBTL) with several mining companies, including PT Makmur Sejahtera Wisesa for 106 megavolt‑amperes (MVA) and PT Maruwai Coal for 71 MVA, to support electrification of mining operations.

Aryo added that Indonesia must continue advancing and positioning itself at the forefront of mining industry development, not only in Southeast Asia but globally. ***