As an archipelagic country, Indonesia Indonesia certainly has various natural resources that are useful for the country’s development. One of them is Indonesia’s potential for mining in the Papua region. With the development of the mining industry in Papua, it turns out that many large sectors are also getting merits by this development, such as the economy. So, how does the mining sector triggers rapid economic growth in Papua? Here is the information for you.
The economy is one of the most significant factors in determining the growth of a province. In other words, this sector should be one of the government’s focuses these days. This is why the mining sector in Papua has been overgrowing now. This is because this sector is the main contributor to economic growth in Papua.
How Does The Economic Growth Go?
Papua’s economic growth was highest in the third quarter of 2021 compared to other Indonesian states. Until the end of September 2021, Papua Province’s economic growth reached 14.54% annually (year-on-year/yoy).
This figure is well above Indonesia’s economic growth rate of 3.51% during the same period. Quoting from the data from the Central Statistics Agency (BPS), the high economic growth in Papua is caused by the mining and quarrying sector.
Papua’s economy, which is measured by gross regional domestic product (GRDP) at constant prices (ADHK) in 2010, supported by the mining and quarrying sector, grew 14.54 percent to Rp 40.33 trillion in the third quarter of 2021 compared to the third quarter of 2020 (year on year or yoy). Without including mining and quarrying sector support, the province’s ADHK GDP grew only 2.42% to Rp 23.62 trillion in the third quarter of this year (yoy).
Therefore, based on data from the Central Statistics Agency (BPS or Badan Pusat Statistik), the Papuan economy, supported by the mining and quarrying sector, grew by 13.14% year on year (yoy) in April-June 2021. This growth rate was higher than 4.06% in the second quarter of 2020.
How Does The Previous Quarter’s Result?
However, growth slowed compared to the previous quarter. From January to March 2021, Papua’s mining and quarrying economies recorded 14.27% growth (year-on-year). Papua’s high economic growth, including mining and quarrying, was due to a significant increase in these sectors in the second quarter of 2021 as well.
BPS recorded Papua’s mining and quarrying sector growth at 34.44% (yoy). In addition, the mining and quarrying sector has a significant contribution to Papua’s economic growth. The percentage reached 35.61%, far exceeding other business fields.
Without mining and quarrying, Papua’s economy only grew 2.81% (yoy) in the second quarter of 2021. Although lower, the Papuan economy has managed to get out of the contraction since the second quarter of 2020.
One Of The Biggest Factor
Of course, the economic growth in Papua is happening because of the various mining companies there. However, one large company is quite famous for its contribution to economic growth in Papua. Namely, PT. Freeport.
One of the companies contributing to realizing rapid economic growth in Papua is PT Freeport Indonesia (PTFI). From July – to September 2021, PT Freeport Indonesia’s production from the Mimika mine is very steady.
As evidence, PTFI’s copper ore production reached 956 million tons in that period or grew 76.05% on an annual basis. PTFI’s gold production also rose 67.76% every year to 968 thousand ounces in the same period.
Thus, the presence of the mining industry is able to boost the economic growth in Papua. In fact, not only Papua is also able to support the Indonesian economy through the presence of mining companies in Papua. In conclusion, the mining sector triggers rapid economic growth in Papua.