Mining Association Responds to Government Plan for State-Owned Commodity Export Entity

Indonesia’s government plans to form a special state body to oversee exports of strategic commodities have drawn attention from mining players. The Indonesian Mining Association (IMA) has urged the government to review the policy comprehensively to maintain balance between strengthening governance, optimising state revenue, and the sustainability of the mining industry.

Executive Director of the Indonesian Mining Association, Sari Esayanti, said the mining industry principally supports the government’s move to tighten supervision of the mineral and coal sector. However, policy implementation must consider long-term sales agreements already agreed with overseas buyers.

‘In implementation, it is necessary to still observe business certainty, continuity of long-term contracts, and a competitive investment climate so that Indonesia’s mining industry remains trusted and can grow sustainably,’ Sari said in a written statement, Wednesday, 20 May 2026.

According to Sari, many mining companies have prepared investment calculations and the economics of their business based on long-term contracts. Therefore, legal certainty and policy stability are important to maintain market confidence and the competitiveness of Indonesia’s mining industry on the global stage.

Previously, President Prabowo Subianto stated that the government would require exports of certain strategic natural-resource commodities to be conducted through designated state-owned enterprises as sole exporters. The commodities to be exported under this mechanism at the initial stage include palm oil, coal, and ferro-alloy.

In his speech to the DPR’s Plenary Session on the Macro Economy Framework and the Fundamentals of Fiscal Policy for the 2027 RAPBN, Prabowo said the policy aims to strengthen export supervision while reducing under-invoicing, transfer pricing, and foreign-exchange leakage from exports.

‘The sale of all our natural resources outputs, we will begin with palm oil, coal, and ferro-alloy steel, and we will require the sellers to channel sales through a state-owned enterprise designated by the Government of Indonesia as the sole exporter,’ Prabowo said.

Economist Syafruddin Karimi of Andalas University views that establishing a state institution to manage commodity exports could strengthen national economic sovereignty if implemented transparently and accountably. However, he warned the government to learn from the experience of BPPC (Badan Penyangga dan Pemasaran Cengkeh) in the New Order era, which led to rent-seeking monopolistic practices due to weak oversight and transparency.

According to Syafruddin, the key issue is not the state’s presence in commodity trade but the design of the institution. If the new entity merely serves as a single export gateway without price transparency and independent oversight, the policy risks creating a new monopoly.

‘Conversely, if run with open governance that protects producers, the body could become an instrument to strengthen national economic sovereignty,’ he said.