Tailings and water management move up the ESG agenda

Two instruments, one rising bar

Two Indonesian policy instruments are quietly turning tailings and water management from the quiet, compliance-only end of a mining project into a factor that shapes access to capital and reputation. The first is PROPER, the environment ministry's Program for Pollution Control, Evaluation, and Rating, which has scored and publicly published the environmental performance of thousands of companies every year since 1997. The second is Indonesia's sustainable finance taxonomy, first issued by the Financial Services Authority (OJK) as the Indonesia Green Taxonomy in 2022 and refined into the Taxonomy for Sustainable Finance Indonesia (TKBI) in February 2024, which determines what counts as green, transition, or neither for lenders and investors. Between them, a mine's tailings design, water discharge, and land management are no longer just an inspection item. They are increasingly a number that follows a company into its cost of capital.

PROPER's gold and green tier, in numbers

The scale of PROPER has grown substantially. In the 2024-2025 cycle, the environment ministry assessed 5,476 companies nationwide, a 22 percent increase in participants from the prior cycle, with new emphasis on industrial estates and facilities operating along priority river basins (DAS), precisely the geography where tailings and process water most directly affect surrounding communities. Of those, 282 companies reached what the ministry calls "beyond compliance" status, 39 rated gold and 243 rated green, the top two of PROPER's five color-coded tiers (black, red, blue, green, and gold, from worst to best).

That figure sits within a longer, gradual climb. In the 2021-2022 cycle, 51 companies won gold and 170 won green, for a combined 221 beyond-compliance ratings. By 2023-2024, that had risen to 79 gold and 196 green, a combined 275. The 2024-2025 combined total of 282 represents further, if more modest, progress even as the assessed pool of companies grew by nearly a quarter, meaning the beyond-compliance share of participants has not kept pace with participation growth. The overwhelming majority of assessed companies still sit at PROPER's middle blue tier, meaning basic compliance rather than leadership, and a smaller but persistent group remains rated red or black each cycle for failing to meet baseline environmental standards.

Who is actually earning it

The mining sector's showing at the top of PROPER is worth naming directly, because so few companies get there. PT Vale Indonesia became the first, and so far the only, nickel mining company in the country to win both PROPER Gold and the ministry's Green Leadership Award, recognition the company received for its 2024 environmental performance, announced in February 2025. In the tin sector, PT Timah's processing and refinery unit at Mentok won PROPER Emas in the 2025 cycle, and PT Mitra Stania Prima, part of the ARSARI Tambang group, also won gold in 2025 for clean energy and circular economy initiatives at its tin operations. That these three gold ratings cluster in nickel and tin, two of Indonesia's most water- and tailings-intensive extraction processes, is itself informative: it shows gold-tier performance is achievable in exactly the subsectors where tailings and water risk run highest, not only in lower-impact manufacturing.

Sirkularium reads PT Vale's standing as the only gold-rated nickel producer less as an isolated achievement and more as a measure of how much headroom remains across the rest of the sector.

Where the Taxonomy draws the line

PROPER measures environmental performance after the fact. Indonesia's sustainable finance taxonomy shapes what gets financed in the first place, and it draws a more cautious line around mining than PROPER's rating scale might suggest. Under the Indonesia Green Taxonomy and its TKBI update, mineral mining and quarrying that supports the energy transition, including nickel, copper, and tin extraction, is classified as a transition activity rather than outright green, meaning it can access sustainability-linked financing but does not qualify for the strictest green-labeled instruments. Coal mining fares worse still: the taxonomy's first edition already effectively closed off any path for coal extraction to be classified as green under any circumstance. That distinction matters for financing terms, insurance, and increasingly for buyers conducting supply chain due diligence, and it means a nickel or tin operator's tailings and water record is one of the few levers it has to move from a transition classification toward the more favorable end of that category.

What good stewardship looks like

Against that backdrop, Indonesia's broader sustainable finance market has kept expanding regardless: outstanding sustainable bonds and sukuk reached US$17.5 billion by the end of 2025, up 23.7 percent year on year, with new issuance for the year rising 34.5 percent to US$4.5 billion, including US$1.1 billion in government-issued green sukuk across two tranches. Most of that capital still flows through sovereign and quasi-sovereign issuers rather than individual mining companies, which is precisely the gap a credible corporate track record on tailings, water, and reclamation is positioned to close over time.

The practical work behind a gold rating or a stronger taxonomy classification is neither exotic nor secret. It is sound tailings design, continuously monitored discharge and receiving water, independent third-party review, and documentation built to withstand scrutiny from a regulator, a lender, or a downstream buyer alike. Done early and consistently, it is also cheaper than doing it only when a PROPER assessor or a financing covenant demands it.

The 2024-2025 cycle's added focus on facilities operating along priority river basins is itself a signal of where the ministry expects the next round of scrutiny to concentrate. Tailings storage and process water discharge sit exactly at that intersection between an individual mine site and the wider watershed it shares with agriculture, fisheries, and drinking water supply downstream. A company that can show, with continuous monitoring data rather than periodic self-reporting, that its discharge stays within permitted thresholds across an entire river basin's dry and wet seasons is building a record that a PROPER assessor, a green taxonomy reviewer, and a community living downstream can all independently verify against the same numbers.

Sirkularium's view

PROPER and Indonesia's sustainable finance taxonomy are not red tape stacked on top of mining operations. They are two increasingly aligned signals, one public and reputational, one financial and structural, that reward operators who were already managing tailings and water responsibly and make that discipline easier to justify to a board weighing cost against long-term risk. With only a handful of mining companies reaching PROPER's gold tier each cycle and mineral extraction still capped at a transition classification under the taxonomy, the sector's headline opportunity is not incremental compliance. It is closing the gap between a small group of leaders like PT Vale and PT Timah and the much larger population of blue-rated operators for whom rigorous, independently verified environmental performance data, commissioned proactively rather than assembled defensively, is the clearest path to better financing terms and a stronger claim on the transition-minerals story Indonesia is trying to tell the world.