System dynamics approach to Indonesia's national tin production planning

Abstract

Indonesia, as the world's leading tin producer, faces increasing pressure to balance economic growth with sustainable resource management. Unregulated exploitation has led to environmental degradation, resource depletion, and market volatility. This study applies a system dynamics (SD) modeling approach to optimize national tin production by simulating three scenarios: low (40,000 tons/year), moderate (50,000 tons/year), and high (80,000 tons/year).Our methodology integrated: (1) data collection from government and industry sources; (2) causal loop diagramming to map system interconnections; (3) stock-flow model development in Vensim; (4) validation through pattern-matching; and (5) multi-scenario simulation across 50 years. Critical to this approach was the indexing of variables to capture temporal changes in resource quality and market conditions, enabling more accurate long-term projections. Analysis of reserve depletion, supply-demand ratio, prices, and revenue revealed that high production rates accelerate reserve exhaustion and trigger price suppression, reducing long-term revenue. Low to moderate production levels maintain higher prices and extend resource lifespan. The optimal production rate of 55,000–60,000 tons/year balances economic returns with sustainability and market stability. This study provides policymakers with a framework to align production quotas with sustainable development goals, supporting evidence-based regulations. Limitations include the exclusion of social, regional, and technological variables, which future research should address.