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Indonesia plans to centralize exports of coal, palm oil and nickel under a new state-owned trading entity. (Photo: iStock)
Indonesian President Prabowo Subianto has announced that a newly created state-owned enterprise will soon take control of exports for several of the country’s most important commodities, including coal, palm oil, nickel and potentially other strategic mineral resources.
Under the new framework, Danantara Sumberdaya Indonesia (DSI), which is 99% owned by sovereign wealth fund Danantara, will become the sole export channel for the commodities.
Indonesia is currently the world’s largest exporter of palm oil, thermal coal and nickel, all commodities that play a central role in global energy and industrial supply chains, including electric vehicle batteries.
Unlock the full article to explore three key takeaways:
- Indonesia plans to centralize exports of coal, palm oil and nickel under a new state-owned entity as the government seeks to tighten control over export earnings, foreign exchange flows and tax revenue.
- Coal, steel and palm oil industry groups warn the new system could disrupt supply chains, contract arrangements and relationships with overseas buyers, while Japanese traders fear reduced market flexibility.
- Investors and analysts say the policy could deepen concerns over policy unpredictability and resource nationalism, with S&P warning the transition may hurt business confidence, capital flows and economic growth.
