Launching Ceremony of Mining and Mineral Industry Institute

Figure 1. Prof. Subroto with Kania Sutisnawinata, Budi Gunawan Sadikin, Mahendra Siregar, Prof. Rhenald Kasali and Prof. Rudi Sayoga.

The Purnomo Yusgiantoro Center (PYC) attended the establishment of The Mining and Mineral Industry Institute (MMII) by PT Indonesia Asahan Aluminum (Inalum), as the new state-owned mining holding company. The MMII aims to become the research center for the downstream mining industry and help the government reaches a target to increase the added value of the mining sector. The launching was held on February 1, 2019, at Darmawangsa Hotel Jakarta and attended by various Indonesia’s energy and mining expert. In the event, there were also MoUs between MMII and five national universities, consist of Universitas Cendrawasih (Uncen), Universitas Indonesia (UI), Institut Teknologi Bandung (ITB), Universitas Gajah Mada (UGM) and Institut Teknologi Sepuluh November (ITS). There was also an MoU between MMII and  Ministry of Energy and Mineral Resources (MEMR) which represented by F.X. Sujiastoto as the Head of Research and Development unit.

In the opening speech, Prof. Subroto, as the former Minister of Energy and Mineral Resources, highlighted the importance of low carbon development policies as the tools to escape from a middle-income trap country. In the mining industry, the development should start to focus on developing its downstream industry so that that mining products value would be increased. Mrs. Ratih Amri, as the Director Executive of MMII, said that MMII was mandated with three main missions, (1) manage national mineral resource reserves through continuous exploration; (2) accelerate the mining downstream industry development, and (3) be the world-class company.

The event was followed by a panel session which was moderated by Kania Sutisnawinata as the Deputy Chief Editor of Metro TV and attended by four speakers, Budi Gunawan Sadikin as the President Director of PT Inalum, Mahendra Siregar as the Ambassador of Republic of Indonesia to the United States of America, Prof. Rudy Sayoga as the Professor of ITB and Rhenald Khasali as the founder of Yayasan Rumah Perubahan. Budi Gunawan Sadikin mentioned that PT Inalum was already handling four other state-owned mining companies namely PT Antam, PT Bukit Asam, PT Timah, and PT Freeport in the last 2018. This made 34 percent of the Inalum group revenue comes from the coal industry. To give added values for its coal product, PT Inalum is planning to build infrastructures to process the coal product into syngas which will be transformed into methanol, then into Dimethyl Ether (DME) and other derivative products. Another two projects which are planning to build this year are Alumina Smelter and High-Pressure Acid Leaching Process (HPAL) Smelter. It is wished that these smelter projects will give added values in terms of export price and help Indonesia established the mining product market in the global value chain. As stated by Mahendra Siregar, today, the global value chain has disrupted due to the trade war, so it is necessary to secure the national export commodities by improving its value in the global market.

Another insight is presented by Prof. Rhenald Kasali and Prof. Rudi Sayoga. Prof. Rhenald Kasali shared his experience in Buru Island when there were gold discoveries which triggered a sudden inflation and many multiplier effects on the island. The local people were so excited with the gold discoveries then they started mining and leaving their crops. The sudden income rise of the local people made the demand of primary needs increased, while the quantity of the consumer goods decreased. The imbalance between demand and supply then lead to the local inflation in Buru Island. This example shows the importance of government involvement in the mining sector to regulate the mining and control the multiplier effect caused by the mining industry. There are four economic multiplier effects in the mining industry, (1) Backward Linkage; (2) Forward Linkage; (3) Demand Linkage; and (4) Fiscal Linkage. While Prof. Rudi Sayoga presented his concern to the post-mining land issues, it is necessary for a mining company to well-planned their mining industry so that it will support the national sustainable development. The government should guarantee that there will be no condition such as a “ghost town” in Indonesia’s post-mining land.

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