Translation:This is mine.
Would it also be correct to say ‘this belongs to me’?
Well....it means the same, but I think that the point of this sentence/exercise is to explain the use of the possessive pronoun.
In this sentence the personal pronoun "aku" is used as a possessive and shortened as a suffix "ku"
Ok makes sense. I guess for me learning Bahasa Indonesia it makes more sense in my head that the more direct translation is ‘it belongs to me’ as milik and to belong are both verbs so the sentence structure can be mirrored, whereas mine is a pronoun (or have I completely misunderstood and adding the qualifier ku makes the whole thing a pronoun? I thought milik was still the verb, adding ku as the pronoun?)
It might sound strange, but there is no verb in the Indonesian sentence.
"milik" is actually a noun (possession).
"milik aku" is shortened to "milikku" = my possession.
"milik kamu" is shortened to "milikmu" = your possession.
"ini milikku" = This is my possession ==> this is mine. "ini milikmu" = This is your possession ==> this is yours.
It's an exercise for the possesive pronouns, it's described here in the "tips & notes"