DSI's Takeover of Ferroalloy Exports Triggers 'Wait and See' Stance
JAKARTA — The government has begun implementing a new governance framework for the export of strategic natural resource commodities through a single state-owned enterprise (SOE) export channel, PT Danantara Sumberdaya Indonesia (DSI). Although the policy is claimed to enhance transparency and optimise state revenue, industry players in the ferroalloy sector are still awaiting clarity on the implementation mechanism and the scope of exemptions that will determine the sustainability of investments in the sector.
The Ministry of Trade issued three ministerial regulations (permendag) governing the export of coal, palm oil, and iron alloys. These regulations aim to strengthen export governance for strategic natural resources and support national downstreaming. The three regulations came into effect on 1 June 2026.
Trade Minister Budi Santoso stated that the regulations are intended to further strengthen trade governance for strategic commodities, ensuring the utilisation of national natural resources provides more optimal economic benefits. The ministry is applying various export regulatory instruments to ensure that the execution of strategic commodity exports by the SOE exporter proceeds in an orderly, transparent, and accountable manner.
The government has divided the export takeover of the three strategic commodities into two phases. The first is a transition phase from 1 June 2026 to 31 December 2026, during which private entities are still permitted to export. The second is the full mandatory phase after 31 December 2026, when DSI will take over exports completely.
During a dissemination presentation, Director of Export for Industrial and Mining Products Muhammad Rifai Abas explained that for iron alloy commodities, the regulation covers 15 eight-digit tariff lines derived from HS 7202. These consist of a group of goods prohibited from export, a group whose export must be accompanied by a surveyor report (LS), and a group that may be exported without an LS.
Under the latest regulation, exports of strategic natural resource commodities in the form of iron alloys may only be undertaken by the SOE exporter. However, the government has provided several exemptions to ensure the policy does not disrupt investment commitments or specific requirements stipulated in laws and regulations.
For iron alloy commodities requiring an LS, exemptions may be granted to non-SOE exporters if the company holds a contract or agreement with the government containing provisions on investment, divestment, and domestic processing and/or refining. Despite the exemption, these exporters must still fulfil the surveyor report requirement as an export document.
Exemptions are also provided for a group of iron alloy commodities regulated for export without an LS obligation. From 1 January 2027, exporters other than the SOE exporter may still export if they possess a certificate (Suket). This certificate is issued based on a confirmation letter from the SOE exporter containing the exporter’s identity, HS code, type of goods, and validity period. The certificate is non-transactional, and one exporter may hold more than one.
Meanwhile, for commodities in the export-prohibited category, the government provides limited exemptions for research and development purposes, re-export, and the export of industrial products made from imported raw materials and/or scrap. Exporters must hold an export approval (PE) and an LS as export documents to utilise this exemption.
Despite the exemptions in the regulation, business actors remain concerned about the new policy making PT DSI the main gateway for strategic commodity exports. Executive Director of The Indonesian Iron and Steel Industry Association (IISIA), Harry Warganegara, revealed that the implementation of the new rule could potentially affect investor perception, particularly foreign investors who have dominated investment in the smelter and iron alloy processing sector.
Harry predicts that business actors will adopt a wait-and-see approach until there is clarity on the implementation mechanism of the policy, which will be fully enforced in 2027. He believes there will certainly be an impact on investment, with investors looking at the implementation first, especially for existing investments. According to him, the exemption provisions for companies with strategic government partnerships are a crucial factor that will determine the investors’ response.