Indonesia will channel exports of its three biggest commodity streams—thermal coal, palm oil and nickel—through the state‑owned Danantara Sumberdaya Indonesia (DSI). The move, announced by President Prabowo Subianto, aims to tighten control over “strategic” resources, but raises questions about contract renegotiations, price stability and foreign buyer confidence.
Business news
Indonesia’s president, Prabowo Subianto, unveiled a new state‑owned enterprise, Danantara Sumberdaya Indonesia (DSI), that will take over the export licensing and logistics for the country’s three largest commodity streams: thermal coal, palm oil and nickel. The decree, published on 21 May 2026, gives DSI authority to review existing contracts, set export quotas and, if needed, redirect shipments to state‑designated buyers. The agency is also tasked with overseeing “other strategic mineral resources” that the government may add later.
Market context
- Coal: Indonesia shipped 511 million tonnes of thermal coal in 2025, accounting for roughly 30 % of global supply. Major buyers include India, Japan and South Korea, which together purchase about 180 million tonnes annually.
- Palm oil: The nation exported 35 million tonnes of crude palm oil (CPO) in 2025, representing ≈ 60 % of world trade. The EU, China and India are the top destinations.
- Nickel: Indonesia produced 1.1 million tonnes of refined nickel in 2025, feeding the EV battery supply chain. The United States, Europe and Japan together account for ≈ 45 % of demand.
These commodities generate roughly US$115 billion in export earnings each year, making the sector a cornerstone of Indonesia’s fiscal budget. The government’s fiscal year 2026 projection expects export revenue to rise to US$123 billion, assuming stable prices and volumes.
What it means
1. Contract renegotiation risk
DSI’s mandate to “review existing contracts” puts private exporters on notice. If the state demands higher royalty rates or tighter delivery windows, exporters could face margin compression. For example, the average royalty on coal exports is currently 5 % of FOB price; a modest increase to 7 % would cut a typical exporter’s profit by US$12 million on a US$200 million shipment.
2. Price volatility exposure
State control may lead to price‑setting mechanisms aimed at stabilising domestic supply. While this could protect downstream industries, it also risks creating a price gap between Indonesian‑priced commodities and global benchmarks (e.g., ICE Coal Index, CPO Spot Price). Buyers may hedge more aggressively, driving up futures premiums.
3. Supply‑chain realignment for downstream users
Battery manufacturers that rely on Indonesian nickel could see longer lead times if DSI prioritises state‑linked smelters. Companies like Tesla and LG Energy Solution have already diversified sourcing to the Philippines and Canada; the new policy may accelerate that trend, reshaping the global nickel supply chain.
4. Potential for added strategic minerals
The decree leaves room for DSI to absorb exports of copper, lithium and rare‑earths in the future. If Indonesia follows the same model for those metals, the country could become a single‑point gatekeeper for a broader set of EV‑critical inputs, amplifying its geopolitical leverage.
5. Investor sentiment and credit outlook
Credit rating agencies have flagged the policy as a “policy uncertainty” factor. S&P Global downgraded Indonesia’s sovereign outlook from stable to negative in March 2026, citing “regulatory shifts that could affect export‑driven revenue streams.” In the short term, the Indonesian rupiah has weakened by ≈ 3 % against the USD since the announcement, reflecting heightened risk perception among foreign investors.
The new state‑owned Danantara Sumberdaya Indonesia prepares to manage Indonesia’s strategic commodity exports.
Strategic implications for buyers
Foreign commodity traders should audit their contract clauses for force‑majeure and government‑intervention provisions. Engaging local partners that have established relationships with DSI could mitigate disruption risk. Moreover, firms may consider price‑adjustment clauses tied to the ICE indices to preserve margin if the state imposes price caps.
For investors, the key metrics to watch are:
- Export‑license issuance volume (monthly reports from the Ministry of Trade)
- DSI‑set royalty rates (published quarterly)
- Rupiah‑USD exchange movements (especially during the first six months of implementation)
By monitoring these data points, market participants can gauge the speed and depth of the transition, and adjust exposure accordingly.
Prepared by the Tech‑Industry Analyst Desk, May 2026
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