Post Mining Economic and Physical Restoration
Is Indonesian mining unsustainable?
Some estimates suggest that Indonesia produces 25% of the world’s total mineral supply so it is no surprise that mining is a key part of the Indonesian economy. In 2023 the mining sector was ranked fourth in terms of its contribution to GDP at 10.5% compared to just over 5% in 2013. According to CRIF, the business information company Indonesia’s main mining groups contribution are Coal and Lignite Mining 50.9%, Oil, Gas and Geothermal Mining 23.7%, Mining and other Excavations 13.2%, and Metal Ore Mining 12.4%. Almost all mining deposits in Indonesia are located within forested areas, many of which are in critical and significant tropical rainforests. This creates an inevitable conflict between mining and protection of the environment. It is generally accepted that the economic benefits of mining for minerals and metals are significant and becoming even more so as demand for advanced technologies increase. The challenge is whether the mining industry are willing or able to minimize the negative impacts. Recent history shows that the intrusive nature of much of mining has resulted in scarring of landscapes and degradation of the environment. In this “thought piece” we put forward an integrated approach that could be applied to all former mining areas that comprehensively address environmental, economic, and social considerations as well as funding and governance.
A large section of the mining market are the large national private companies, state owned enterprises and to a lesser extent the multinational corporations. The remainder of the market is the artisanal miners, working individually or in groups with up to 30% of these being women, and it is estimated that 50% of all minerals are mined by artisanal miners. The environmental and safety standards of larger mining groups are typically better than for artisanal miners, but as larger miners often buy raw product from the artisanal miners and exercise no control on their suppliers, low standards are widespread. The restoration bonding mechanism was supposed to incentivize good practice but has failed due to lack of regularity clarity and consequent weak enforcement. Industry participants complain that bond values are set at level that significantly exceed restoration costs and incentivize corruption. Mining law acknowledges small-scale artisanal mining activity, but these miners are neither required to perform reclamation nor to provide reclamation bonds. The result is that large tracks of former mining land remain unrestored scarred landscapes and are often a serious public health and safety hazard.
Legal and regulatory measures
Law 4/2009 defines post-mining rehabilitation "as planned, systematic, and continuous activities subsequent to the completion of all mining activities that aim at restoring the functions of the natural environment and social functions according to local conditions throughout the mining zone". Mine closure plans are mandatory and must be updated regularly but these tend to be minimalist and not in keeping with international industry best practice. It is usually not feasible to return the landscape to its prior condition, although creative repurposing may be an option. It is understandable that the first priority of mining companies is to transform the post-mining landscape to a stable condition as part of it mine closure operations, but other aspects are deprioritised or not considered at all. Such an approach is no longer sustainable and there is a growing demand for the mining industry to do more. With large-scale mining operations employing hundreds, sometimes thousands of people, mining companies are increasingly expected to enable economic transitions for mine workers, and their families following mine closure.
A new approach is required
The London based ICMM’s mining company membership organisation’s Integrated Mine Closure: Good Practice Guide (2019 revision) now advocates incorporating sustainable development considerations (e.g. environment, economic, and social impacts) into mine closure as part of the mine development planning process. Despite these positive global signals there are few Indonesian examples of mining companies leading successful transitions to alternative economies.
It is a terrible paradox that, the technologies that drive decarbonization of the energy sector to create a “greener planet” require minerals that are often delivered by irresponsible mining processes which destroy some of most bio-diverse ecosystems in the world. But it doesn’t have to be like that.
Here we advocate that a more integrated approach becomes mandatory for all Indonesian mining operations involving:
An Economic Development Plan
Eco-System Restoration Plan
Community and Social Plan
Physical Masterplan
Transition Funding Plan
restoring-demage-environments-2-0]Governance
This approach would require mining companies to focus not just on operational and technical aspect within the mining concession area but to integrate the social and economic impacts of the overall mining operation including post closure. That will require greater local/regional stakeholder engagement throughout the life cycle of mine, including during concurrent or progressive reclamation. This progressive approach to transition from a mining to post-mining economy is more likely lead to positive outcomes. An innovative approach could include use of trusts or foundations where local communities can develop their own local ventures and development initiatives.
