Internal Conflict Erupts in Nahdlatul Ulama Over Coal Mining Concession

In 2024, the Indonesian government awarded a 26,000-hectare coal mining concession in East Kalimantan to Nahdlatul Ulama (NU), the country's largest Islamic organization with approximately 80 million members. This decision has led to significant internal strife within NU, as various factions vie for control over the lucrative venture. The concession was previously held by a Jakarta-based company and has not yet commenced operations. Many grassroots members of NU are calling for the return of the mining rights to the government, arguing that the concession is the root cause of escalating factional disputes and is damaging the organization's reputation.

Faith and Power: Coal Mining Deal Splinters Indonesia’s Largest Islamic GroupThe Straits Times

The Indonesian government's decision to allow religious organizations to manage mining concessions was framed as a means to redistribute economic opportunities and improve equity. However, critics argue that the move is politically motivated, aimed at garnering support from influential groups like NU. The second-largest Islamic organization, Muhammadiyah, also received a mining concession in South Kalimantan, which has yet to begin operations. Observers have raised concerns about the technical and financial capabilities of these religious organizations to manage such ventures effectively.

The Straits Times

The internal conflict intensified following the dismissal of NU chairman Yahya Cholil Staquf by the Supreme Council on December 9, 2024. Zulfa Mustofa was appointed as acting chairman, leading to further divisions within the organization. A consultative meeting on December 21, attended by representatives from 55% of NU's regional branches, called for an extraordinary congress to elect a new leader free from business conflicts. Members expressed a desire for reconciliation and urged the leadership to return the mining rights to the government.

Faith and Power: Coal Mining Deal Splinters Indonesia’s Largest Islamic Group

At a gathering on December 17, NU executive board member Yenny Wahid emphasized the risks of entrusting responsibilities to unqualified parties, advocating for the return of the mining rights. She suggested that government support for mass organizations should focus on funding social programs rather than mining ventures. Conversely, some leaders, like Savic Ali, proposed converting the coal concession into a carbon credit project, arguing that ecological considerations should take precedence over profit.

Faith and Power: Coal Mining Deal Splinters Indonesia’s Largest Islamic Group

The Supreme Council of Nahdlatul Ulama has committed to reinstating Yahya Cholil Staquf as part of reconciliation efforts, although the outcome remains uncertain. Dr. A’an Suryana, a fellow at the ISEAS – Yusof Ishak Institute, warned that a prolonged internal conflict could lead to a crisis of legitimacy for NU, which has historically championed moderate Islam in Indonesia.

The Straits Times

The ongoing dispute within Nahdlatul Ulama highlights the complexities of intertwining religious authority with high-stakes resource management in Indonesia. This situation raises broader questions about governance, equity, and institutional integrity, with potential implications for political stability and investment confidence in Southeast Asia's largest economy. As the organization navigates this internal crisis, the balance between economic ambition and social cohesion remains a critical concern.

Faith and Power: Coal Mining Deal Splinters Indonesia’s Largest Islamic Group