The Ministry of Energy and Mineral Resources (ESDM) has managed to auction 14 out of 20 Mining Business License Areas (WIUP) offered in 2023, yet has to deal with low demand for iron ore mining areas despite the fact that Indonesia imports roughly 16 million tons of iron ore annually.
“There was no interest in iron ore, despite our annual imports,” Tri Winarno, Director General of Minerals and Coal at the ESDM ministry, told a hearing with the House of Representatives’ (DPR) Commission XII on Tuesday, November 12, 2024.
The remaining six WIUPs did not attract buyers, mainly due to ongoing investigations by the Corruption Eradication Commission (KPK), objections from local officials, or lack of interest, particularly on iron ore sites.
The 14 auctioned WIUPs cover three main commodities: nickel (four WIUPs), coal (seven WIUPs), and gold (three WIUPs).
One notable WIUP, Ulu Rawas, in North Musi Rawas Regency, South Sumatra, has been offered multiple times, with a total area of 6,707 hectares, partly designated for limited production forest and other specific land uses. The initial bid compensation for data and information on Ulu Rawas WIUP stands at Rp10 billion (US$634,000).
Indonesia’s iron ore and steel imports reached 13.8 million tons in 2023, marking a slight 1.96 percent decrease from 2022, according to Statistics Indonesia (BPS).
China was the leading source of these imports at 3.7 million tons, followed by Japan (2.4 million tons) and South Korea (933,000 tons).
Despite high import levels, domestic interest in iron ore mining remains limited, underscoring a challenging landscape for auctioning WIUPs for certain minerals.
