Observer says illegal mining crackdown improves Indonesia's tin governance
Unlicensed mining (PETI) has long been a structural problem hampering the optimisation of the national tin industry.
University of Indonesia state-owned enterprise observer Toto Pranoto said the crackdown on illegal mining and the closure of tin smuggling routes in the Bangka Belitung Islands represent an important momentum to improve the governance of the national tin industry, while also strengthening the performance of PT Timah Tbk (TINS).
According to Toto, unlicensed mining has long been a structural problem hampering the optimisation of the national tin industry.
The complexity of the networks involved, he said, makes handling the issue difficult, both for law enforcement officials and for PT Timah as the state-owned company managing tin resources.
“The PETI problem is not a new story. The complexity of the networks involved means law enforcement officials face major challenges, while PT Timah is also in a difficult position when dealing with illegal mining practices,” Toto said.
He assessed that the government’s move to crack down on illegal mining is an important starting point for building a healthier tin ecosystem. However, the effort must be continued consistently so that it does not only produce short-term improvements.
Toto said improvements to tin governance need to be directed at strengthening the legal supply chain, so that mineral resources can provide greater added value for the state, the public, and producing regions.
PT Timah recorded improvements in operational activity beginning to show in the company’s performance in the first half of 2026. PT Timah’s tin ore production increased 75 percent to 12,232 tonnes of tin compared with 6,997 tonnes of tin in the same period the previous year.
Tin metal production also increased 58 percent to 10,865 metric tonnes, while sales volume grew 85 percent to 10,984 metric tonnes.
The increase in production and sales was followed by stronger financial performance. PT Timah’s revenue in the first half of 2026 reached Rp10.42 trillion, growing 146.9 percent compared with Rp4.22 trillion in the first half of 2025.
Net profit attributable to owners of the parent entity increased from Rp300.07 billion to Rp2.71 trillion. Operating profit rose from Rp380.20 billion to Rp3.46 trillion.
The company’s performance was also supported by a 52 percent increase in the average selling price of tin metal to 49,794 US dollars per metric tonne.
According to Toto, the improved performance needs to be maintained by ensuring consistent law enforcement against illegal mining, accompanied by strengthening PT Timah’s capacity in terms of operations, governance, and technological mastery from upstream to downstream.
Beyond law enforcement, he said the restructuring of the tin industry needs to provide room for community mining to transform from informal activity into legal, supervised mining activity that provides economic benefits for the public.
One step that can be taken is directing community miners into community mining areas in accordance with regulations and building healthy partnership patterns with state-owned companies.
In this way, the crackdown does not only stop illegal activity, but also offers a way out for communities that have depended on mining for their livelihoods.
Toto added that the success of restructuring the tin industry cannot be measured solely by the number of illegal mines closed or the increase in company production.
The impact must be visible in state revenue, the legalisation of community mining activity, and environmental restoration in former illegal mining areas.
“The parameters of success must be concrete, namely tax and royalty revenues increase, community mining activity transforms into legal operations partnering with PT Timah, and former PETI areas are restored. If these three things proceed, the crackdown truly produces economic, social, and environmental benefits,” Toto said.
Previously, President Prabowo Subianto in his state address at the Annual Session of the People’s Consultative Assembly and the Joint Session of the House of Representatives and the Regional Representatives Council at the Parliament Complex in Jakarta on Friday (14/8) said the government has closed around 1,000 illegal tin mining locations in the Bangka Belitung Islands.
The crackdown was carried out alongside efforts to close tin smuggling routes. The government has also involved law enforcement officials in handling unlicensed mining practices that have caused state revenue potential to be less than optimal.