Indonesia orders state to take at least 70% of mining permit benefits

what happened

Indonesian President Prabowo Subianto said on Saturday that the state should receive a larger share of income from all mining permits and, if necessary, control assets through stakes. He made the remarks in a speech to members of Muhammadiyah, one of the country's largest Islamic groups, according to Reuters.

The presidential palace clarified that the 70% figure refers to proceeds from managing mining permits. Prabowo added that Indonesia remains open to investors in the mining sector, but most profits must go to the Indonesian people.

Earlier this year, local media reported, citing Deputy Energy Minister Yuliot Tanjung, that officials had discussed a gross-split scheme giving the government 70% of output and the mine operator 30%. In June, Energy Minister Bahlil Lahadalia said the proposal had been dropped after consultations with Prabowo.

why it matters

For companies operating in Indonesia's coal and mineral sectors, a larger state share reduces profits and adds uncertainty. Details of the rules have not been disclosed, so the real impact on shares and exports will depend on how the decision is implemented.

market impact

Indonesian mining shares: a bigger state share cuts operators' profits from permits

• ▼Indonesian mining shares pressure down — a larger state share cuts operators' profits from permits

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