Economic Gains, Ecological Pain: The Hidden Costs of Mineral and Coal Down streaming
Summary: Indonesia’s Mineral and Coal down streaming policy has been promoted as a strategic instrument of economic transformation, aimed at shifting the country away from raw material exports toward higher value-added domestic processing, expanding employment opportunities, increasing state revenues, and strengthening Indonesia’s position within global supply chains, particularly in the nickel sector. However, in nickel-producing regions of Eastern Indonesia such as Sulawesi and North Maluku, the accelerated development of smelters has also generated substantial socio-ecological costs. These include declining air, water, and soil quality; deforestation and coastal ecosystem degradation; rising public health risks; and the displacement of traditional livelihoods, often without proportional redistribution of economic benefits. This article critically examines this paradox by arguing that the success of Mineral and Coal down streaming cannot be assessed solely through rising investment figures, export values, and regional gross domestic product indicators. Instead, policy evaluation must incorporate distributive justice, public health protection, and environmental sustainability as core criteria. Drawing on Islamic economic perspectives, specifically the concepts of khalifah (stewardship of the earth), mizan (balance), ‘adl (justice), amanah (trust), and maqasid al-shariah (the protection of life and public welfare), this article proposes an ethical and operational framework to reorient down streaming policy beyond mere “smelterization.” Policy recommendations include tiered incentives based on value-chain depth and environmental performance, binding emission and waste-management standards with transparent data disclosure, strengthened social and health protections for affected communities, post-mining ecosystem rehabilitation, mandatory local labor and small-enterprise participation, energy transition within processing industries, and participatory civil society oversight. Through these measures, Mineral and Coal down streaming can be redirected toward a more just and sustainable form of industrialization aligned with public interest and intergenerational responsibility.
Mineral and Coal Down streaming at a Crossroads: Between Economic Acceleration and Ecological Scars
There are moments when a region grows gradually, sustained by rice fields, gardens, and coastal fisheries, only to be abruptly transformed, as if pulled forcefully by a powerful current. This is the lived experience of many communities in Eastern Indonesia’s nickel-producing regions,…
