What recent policy shifts mean for the commodities sector in Indonesia

Indonesia’s regulatory environment has long carried a risk of short-term shifts in tax, regulation, export controls and commercial mandates. 

Jakarta is increasingly using industrial policy and regulation to align demand for critical commodities with domestic economic and political interests, as well as wider geopolitical competition. A series of proposed reforms through 2026 show this approach and point to a more volatile and less predictable regulatory environment for private sector organisations to navigate. 

Policy direction in the commercial mining sector

Indonesia’s commercial mining sector shows this clearly. Commodities such as nickel, copper, gold and tin attract strong foreign interest and foreign direct investment. The sector has a broad international footprint, with companies from China, the US, Japan, Australia, France, Canada and India being involved in major joint ventures. 

Jakarta has tried to balance a regulatory framework that favours Indonesian control with the need to keep overseas capital, which remains vital to the sector’s growth. Recent industrial policy reflects this balancing act. 

In February 2025, parliament passed the Fourth Amendment to the Mineral and Coal Mining Law (UU Minerba). The changes aimed to push more downstream processing onshore, especially for electric vehicle batteries, and to widen access for small businesses and religious groups. 

More recently, the government considered higher mining royalties on copper, tin, nickel, gold and silver, alongside an export tax on some minerals, including coal. These measures were due to take effect in June 2026, however on 11 May, the energy and mineral resources minister announced a delay. 

External pressure? Domestic influence? The delay potentially represents opposition on both fronts over perceptions that the proposed royalties were pushing the boundaries for organisations operating in Indonesia in pursuit of economic interests. Regardless of the cause, the episode highlights growing uncertainty around regulatory direction and timing. 

Trade controls and export oversight

President Prabowo Subianto has also announced plans to route exports of selected commodities, including palm oil, coal and ferroalloys, through a state linked entity. Indonesia’s new sovereign wealth fund, Danantara, would also gain greater scope to review contracts against global market benchmarks. 

Details remain limited. There is no clear consultation process or implementation timeline. If introduced, a centralised export framework would mark an unprecedented shift in Indonesia’s trade and regulatory model. 

It remains unclear whether this proposal will proceed, be diluted, or be reversed, as has happened with past export controls. Previous attempts have prompted strong reactions from external players, including buyer action by Chinese firms. 

What this means for business 

These episodes are not just short-term policy swings. They point to a wider shift towards a tougher operating environment for international organisations in Indonesia. In the commodities sector, this could mean greater state involvement in licences, concessions and market access. The government is testing where it can assert more control, even if it later softens or delays individual measures. 

Similar regulatory pressure is emerging in other sectors, including technology, highlighted by the ongoing legal case involving the Gojek founder over alleged corruption charges.  

For the private sector, operating in Indonesia now involves higher exposure to regulatory change, government intervention and environmental constraints, often with limited notice.