Indonesia advances export control plan despite uncertainty

[JAKARTA] Indonesia is pushing ahead with plans to centralise exports of key commodities starting on Monday (Jun 1), casting a cloud of regulatory uncertainty over natural resource producers. 

Coal, palm oil and ferroalloy producers are expected to start submitting export-related documents to the newly formed state-owned company Danantara Sumberdaya Indonesia beginning on Jun 1, said Coordinating Economic Minister Airlangga Hartarto at a press briefing in Jakarta on Sunday. 

The company, a unit of sovereign wealth fund Danantara, will take over specific export activities as early as September or latest by Jan 1, 2027, he said. Indonesia’s Finance Minister Purbaya Yudhi Sadewa and Danantara chief operations officer Dony Oskaria were also present at the briefing.

The announcement comes as uncertainty hangs over Indonesia’s natural resources sector after the centralisation plan was announced earlier this month, although only limited details are available. The announcement rattled markets, and raised concerns about supply disruptions from the world’s top exporter of coal and palm oil.

Dozens of listed natural resource producers have been unable to assess the policy’s impact because details have not been issued, indicated stock exchange filings late on Friday. 

Notable outliers include state-owned nickel miner Aneka Tambang, which said most of its sales are domestic, and Vale Indonesia, which said none of its products are affected by the policy.

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Danantara is currently building the newly created company’s governance structure, and is in the process of hiring personnel, Oskaria said at the briefing. BLOOMBERG