Mining Sector Projected to Drive North Sumatra's Economic Growth and Local Revenue
NERACA Jakarta – The mining sector has proven to be a primary driver of both national and regional economic growth. In Dairi Regency, North Sumatra, the operations of PT Dairi Prima Mineral (DPM) are projected to make a significant contribution to increasing locally generated revenue (PAD) and strategic infrastructure development.
The North Sumatra Provincial Government has placed high expectations on the sector to push the pace of economic growth to 7.6 per cent by 2029, up from 5.03 per cent in 2024, in line with the national growth target of 8 per cent.
"North Sumatra has been given an investment realisation target of Rp53.7 trillion from both foreign and domestic investment," said the Head of the North Sumatra Provincial Investment and One-Stop Integrated Services Agency (PMPTSP), Dr H. Faisal Arif Nasution, as quoted in a statement on Monday (21/7).
"The presence of PT Dairi Prima Mineral is greatly anticipated to soon enter the construction and production phases so that it can contribute to achieving these targets," he continued.
Faisal added that the presence of mining companies such as DPM also brings the potential to strengthen the local economy, both through business partnerships and employment absorption. "DPM can build partnerships with micro and small enterprises so that small business operators can move up and enter the industrial supply chain," he explained.
"This includes absorbing local labour, which ultimately has a direct impact on the welfare of surrounding communities," Faisal added.
At the local level, PT DPM's operations are believed capable of lifting Dairi Regency's PAD, which has so far remained below 10 per cent of the total regional budget (APBD). PAD was recorded at Rp70.43 billion (6.2 per cent) in 2022, rising to Rp91.30 billion (7.5 per cent) in 2023 and Rp98.38 billion (7.8 per cent) in 2024.
Social observer from the University of North Sumatra (USU), Agus Suryadi, assessed that the presence of mines such as DPM could serve as a locomotive for the local economy if managed in an accountable and inclusive manner.
"The mining sector has great potential to boost PAD through taxes and levies. This provides fiscal space for regional governments to strengthen public services and infrastructure," he said.
Agus also supported the central government's steps in improving the investment climate. "The main problems with investment are complicated licensing and overlapping regulations. The acceleration of mining investment such as DPM must be accompanied by bureaucratic reform at the regional level," he stressed.
However, he cautioned that economic growth supported by the mining sector should not create social inequality. "Corporate social responsibility programmes must genuinely reach communities surrounding the mine so that jealousy or conflict does not arise," he concluded.
At the national level, the mining sector has also made a major contribution to investment achievement. Data from the Ministry of Investment and Downstreaming/BKPM recorded total Indonesian investment in 2024 reaching Rp1,714.2 trillion—surpassing the Rp1,650 trillion target—with significant contributions from the mining subsector.
Deputy Minister of Investment and Downstreaming, Todotua Pasaribu, affirmed that regulatory reform is the key to creating a conducive investment climate. "We are currently revising three implementing regulations and forming a task force to crack down on thuggery in the field. Regulatory and licensing reform is an absolute prerequisite for accelerating investment," he said.
The North Sumatra Provincial Government hopes that the presence of PT DPM will not only serve as a regional economic driver but also as an example of investment that is inclusive, sustainable, and oriented towards the community.
The North Sumatra Provincial Government has placed high expectations on the sector to push the pace of economic growth to 7.6 per cent by 2029, up from 5.03 per cent in 2024, in line with the national growth target of 8 per cent.
"North Sumatra has been given an investment realisation target of Rp53.7 trillion from both foreign and domestic investment," said the Head of the North Sumatra Provincial Investment and One-Stop Integrated Services Agency (PMPTSP), Dr H. Faisal Arif Nasution, as quoted in a statement on Monday (21/7).
"The presence of PT Dairi Prima Mineral is greatly anticipated to soon enter the construction and production phases so that it can contribute to achieving these targets," he continued.
Faisal added that the presence of mining companies such as DPM also brings the potential to strengthen the local economy, both through business partnerships and employment absorption. "DPM can build partnerships with micro and small enterprises so that small business operators can move up and enter the industrial supply chain," he explained.
"This includes absorbing local labour, which ultimately has a direct impact on the welfare of surrounding communities," Faisal added.
At the local level, PT DPM's operations are believed capable of lifting Dairi Regency's PAD, which has so far remained below 10 per cent of the total regional budget (APBD). PAD was recorded at Rp70.43 billion (6.2 per cent) in 2022, rising to Rp91.30 billion (7.5 per cent) in 2023 and Rp98.38 billion (7.8 per cent) in 2024.
Social observer from the University of North Sumatra (USU), Agus Suryadi, assessed that the presence of mines such as DPM could serve as a locomotive for the local economy if managed in an accountable and inclusive manner.
"The mining sector has great potential to boost PAD through taxes and levies. This provides fiscal space for regional governments to strengthen public services and infrastructure," he said.
Agus also supported the central government's steps in improving the investment climate. "The main problems with investment are complicated licensing and overlapping regulations. The acceleration of mining investment such as DPM must be accompanied by bureaucratic reform at the regional level," he stressed.
However, he cautioned that economic growth supported by the mining sector should not create social inequality. "Corporate social responsibility programmes must genuinely reach communities surrounding the mine so that jealousy or conflict does not arise," he concluded.
At the national level, the mining sector has also made a major contribution to investment achievement. Data from the Ministry of Investment and Downstreaming/BKPM recorded total Indonesian investment in 2024 reaching Rp1,714.2 trillion—surpassing the Rp1,650 trillion target—with significant contributions from the mining subsector.
Deputy Minister of Investment and Downstreaming, Todotua Pasaribu, affirmed that regulatory reform is the key to creating a conducive investment climate. "We are currently revising three implementing regulations and forming a task force to crack down on thuggery in the field. Regulatory and licensing reform is an absolute prerequisite for accelerating investment," he said.
The North Sumatra Provincial Government hopes that the presence of PT DPM will not only serve as a regional economic driver but also as an example of investment that is inclusive, sustainable, and oriented towards the community.