LPEM FEB UI Study Finds AMMAN Investment and Operations Contribute Rp173 Trillion Annually
The Institute for Economic and Social Research, Faculty of Economics and Business, University of Indonesia (LPEM FEB UI) has released findings from a study titled “Analysis of Macroeconomic and Socioeconomic Impact of PT Amman Mineral Nusa Tenggara (AMMAN)” estimating the contribution of AMMAN’s mining operations, smelter construction, and Community Development and Empowerment Programme (PPM) to the national and regional economy from 2018 to 2024.
The study employed an economic multiplier approach based on Inter-Regional Input-Output (IRIO) methodology to estimate the economic impact of AMMAN’s investment expenditure, operational costs, and community empowerment programmes on the national and regional economies. This approach not only calculates direct impacts such as spending on goods and services from contractors and suppliers related to AMMAN’s operations, but also indirect impacts arising from supplier production activities to meet those needs. Through inter-sectoral and inter-regional linkages, these activities create multiplier effects extending beyond AMMAN’s operational location to connected regions.
The study found that AMMAN’s activities made significant contributions to the national economy through increased output, GDP formation, job creation, and strengthened Indonesia’s fiscal position and external balance. Throughout the study period, AMMAN’s contribution to national GDP formation reached Rp173.4 trillion, or an average of Rp24.8 trillion per year, equivalent to approximately 0.13% of Indonesia’s 2024 GDP at current prices.
Beyond macroeconomic contributions, the study demonstrated widespread socioeconomic impacts. According to Uka Wikarya, Head of Natural Resources and Energy Studies at LPEM FEB UI, AMMAN’s business activities created economic opportunities for communities across various regions. “The study findings show that AMMAN’s contribution is visible not only in macroeconomic figures but also at household and community levels. AMMAN’s operational activities generate extensive multiplier effects. For example, the need to supply food for thousands of employees supports farmers, livestock breeders, and local food suppliers. Similarly, logistics and other service requirements create employment opportunities across various sectors and regions. This is why AMMAN-driven economic growth has broad-based impact reaching various population segments,” Wikarya stated.
The study also documented improved community welfare through household income generation of Rp67.6 trillion during the study period. This income increase contributed to a reduction in the national poverty rate by 0.024 to 0.098 percentage points (approximately 80,000 to 206,000 people), and a reduction in the national unemployment rate by 0.012 to 0.069 percentage points (approximately 29,000 to 90,000 people).
On the fiscal front, AMMAN made substantial contributions to state revenue. From 2018 to 2024, the company’s total fiscal contribution, including both direct payments to the state treasury and indirect taxes from businesses affected by AMMAN’s activities, reached Rp39.05 trillion, encompassing tax payments, royalties, non-tax state revenues (PNBP), and increased fiscal receipts from related sectors.
From an external perspective, AMMAN’s export activities also contributed positively to Indonesia’s balance of payments. The company’s total exports reached USD10.29 billion during the study period, generating net foreign exchange savings of USD7.66 billion, or an average of USD1.09 billion per year. These findings indicate AMMAN’s role in strengthening Indonesia’s external stability and foreign exchange reserves.
In terms of employment, AMMAN’s activities generated an average of approximately 55,000 jobs annually nationwide. This figure peaked in 2024 with more than 105,000 employment opportunities. Job creation stemmed not only from direct company operations but also through multiplier effects on other connected economic sectors within domestic supply chains.
Looking ahead, LPEM FEB UI believes that AMMAN’s copper smelter operations will increasingly enhance domestic value addition, strengthen national mineral industry downstream development, and promote downstream metal-based industries such as electronics, energy, and manufacturing. With appropriate policy support and downstream industrial ecosystem strengthening, AMMAN has the potential to become a driver of national economic structure, increase natural resource value addition, and promote Indonesia’s sustainable and inclusive economic growth.