JAKARTA, Indonesia — President Prabowo Subianto announced Wednesday that a newly formed state-owned enterprise will take over all exports of thermal coal, palm oil and iron alloys by September, a sweeping government intervention that analysts described as a hostile takeover of the country’s most valuable commodity sectors with global supply-chain implications.
Indonesia is the world’s largest exporter of thermal coal, burned for power generation, and of palm oil, a ubiquitous ingredient in food, cosmetics and biofuels. The archipelago of 287 million people also holds the largest known reserves of nickel, critical for the stainless steel and electric vehicle batteries that underpin the energy transition.
Prabowo told parliament the shift would increase tax revenue and help restore government reserves depleted by energy price shocks sparked by the war in Iran. The new regulation, announced Wednesday, concentrates export management in a single state company that was established only recently.
Bhima Yudhistira, executive director of the Center of Economic and Law Studies, said the policy “could be classified as a hostile takeover” and was “a very dangerous policy for investors.” He warned that it could weaken trust among international buyers, increase uncertainty in commodity contracts and leave the government’s tax revenue far short of its targets.
Yvonne Mewengkang of the Indonesian Mining Association said companies are awaiting implementing regulations and that “the plan itself has had an impact on businesses.” The uncertainty, she said, was already affecting investment plans.
The move could ripple across global markets. China, the largest buyer of Indonesian nickel for its electric vehicle industry, may face supply disruptions. Benchmark prices for palm oil and coal could rise if exports slow or are restricted. The new state-owned enterprise has no track record handling such a vast and complex trade portfolio.
The policy is the latest in a series of resource-nationalist moves under Prabowo, who took office in 2024. Indonesia earlier banned exports of unprocessed nickel ore, drawing a trade challenge from the European Union at the World Trade Organization. While that ban aimed to force domestic processing, the new export-control regime extends to finished and semi-finished goods as well.