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Study on Socio Economic Benefit of Nickel Mining Industry in Southeast Sulawesi Province Indonesia and It’s Impact on Local Economy
Current Issue
Volume 2, 2015
Issue 6 (November)
Pages: 77-86   |   Vol. 2, No. 6, November 2015   |   Follow on         
Paper in PDF Downloads: 70   Since Nov. 3, 2015 Views: 1677   Since Nov. 3, 2015
Authors
[1]
Ukar Wijaya Soelistijo, University of Islam Bandung (UNISBA), Institute of Technology Bandung (ITB), Centre for Education and Training of Mineral and Coal Technology, Bandung, Indonesia.
[2]
Aryo Prawoto Wibowo, Institute of Technology Bandung (ITB), Bandung, Indonesia.
[3]
La Ode Aswandi, Institute of Technology Bandung (ITB), PT Tambang Sejahtera, Jakarta, Indonesia.
Abstract
Southeast Sulawesi province is located in an area containing large quantity of nickel ore resources. Nickel mining contributes significant socio economic benefit, both direct and indirect ones, for the region. It is indicated that the net present value (NPV) of USD 253,198,822 and benefit cost ratio (BCR) of 2.15 of the nickel mining and benefit of USD 18,240,246 with BCR value of 5.98 on nickel processing activities will provide the province regional economy within the production life of 20 years. The company would gain benefit USD 210,324,423 with BCR value of 1.22. While province will gain a net benefit of USD 39,948,971 with BCR value of 6.19. Based on the net social gain (NSG) analysis model at current prices, net social benefit of nickel mining activities for Southeast Sulawesi Province is USD 4,482,688 as it’s annual average in the 8-year mine life, with the value of net gain coefficient (NGC) of 6.19%, while nickel processing activities will provide net social benefit of $ 47,010,028, on average each year over the 20 year life of the production, with NGC value of 42.36%. Nickel mining and ferronickel processing industry sector has multiplier effect and upstream-downstream linkage numbers relatively low compared with other economic sectors. Mineral processing plant as mandated by Law No. 4 of 2009 on Mineral and Coal Mining, pursued construct at the mine site, so that socio economic benefit of mining is not becoming an opportunity cost for the province. Looking the prospects for future nickel mining industry, the local government is expected to prepare the resources and infrastructure to support the nickel mining and processing activities, which would provide net socio conomic benefit greater, for a long time for the local society. The methodology applied in this study is based on macro and micro economic theory, social-economic benefit cost analysis, shift-share analysis, net social gain and input-output models.
Keywords
Nickel Resource Development, Extended Cost Benefit Analysis, Net Social Gain, Shift-Share Analysis, Input-Output Models
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