JAKARTA (The Thursday Times) — Indonesian President Prabowo Subianto said on Saturday that the state must receive at least 70 per cent of the benefits from every mining permit in the country and, if necessary, take control of mining companies’ shares.
“From now on, (of) all mining permits, at least 70% must benefit the state. If necessary, the shares should be state-controlled,” Prabowo said in a speech in Palu, Central Sulawesi, at the opening of a national assembly and 114th anniversary celebrations of Muhammadiyah, one of Indonesia’s largest Islamic organisations. He said he had given the instruction to his ministers, in particular the minister of energy and mineral resources.
A statement from the presidential palace later said the 70 per cent referred to the proceeds from the management of mining permits.
Prabowo said Indonesia remained open to investors in the mining sector, but that “the profits must predominantly go to the Indonesian people”. Where the government needed outside capital, he said, investors could recover what they had put in, after which most of the profits should belong to the nation. He said he expected the benefits to be felt “within a few months”.
He also said all exports would now have to pass through a single channel run by an agency the government designates, a step he said would stop companies declaring less than they actually ship, “so that the country can no longer be deceived”.
The 70 per cent figure has been floated before. Earlier this year, local media quoted Deputy Energy Minister Yuliot Tanjung as saying officials had discussed a gross-split scheme for the mineral and coal sector, under which 70 per cent of output would go to the government and 30 per cent to the mine operator. Energy Minister Bahlil Lahadalia said in June that the proposal had been dropped after consultations with Prabowo.
Indonesia is the world’s largest producer of nickel, a key metal in electric-vehicle batteries, and one of the biggest exporters of coal. It has banned exports of raw nickel ore since 2020 to push miners to process the metal at home.
The announcement comes in a turbulent week for Prabowo’s government, after Vice-President Gibran Rakabuming Raka resigned over a row about his school certificate.
