Prabowo orders at least 70% of mining permit proceeds to go to the state

Indonesian President Prabowo Subianto has instructed his ministers, in particular Energy and Mineral Resources Minister Bahlil Lahadalia, to ensure that at least 70% of the proceeds from all mining business permits (IUP) go to the state. He said the state could take control of mining companies' shares if necessary.

"From now on, all mining permits, at least 70% must benefit the state. If necessary, the shares should be state-controlled," Prabowo said on Saturday, 14 November, according to Reuters. He was speaking at the opening of the Tanwir and 114th anniversary of Muhammadiyah, one of Indonesia's largest Islamic organisations, in Palu, Central Sulawesi.

A statement from the presidential palace said the 70% figure referred to the proceeds from the management of mining permits, Reuters reported.

Investors can recover their capital first

Prabowo said investors remain welcome. "If necessary, let's control the shares. If not, because we need capital, we may accept their investments. They will get their capital back, but after that, the majority of the profits should belong to the Indonesian nation," he said, according to Kompas.

He said the approach was already being enforced. "We have established this, and I am confident we will feel the benefits within a few months," Prabowo said, according to Kompas.

Exports through a single channel

Prabowo also said all exports must now go through a single channel, an agency designated by the government, so that reported volumes match actual shipments. "If the export is 100 tons, then report 100 tons. Do not report 100 tons when only 50 tons or 30 tons were actually shipped," he said, according to Kompas. ANTARA reported that he said governors in many regions had reported similar problems.

Prabowo did not name the agency in the remarks reported by these outlets. The government began a transition period on 1 June 2026 under which exporters of coal, palm oil and ferro alloy must report their export activity to PT Danantara Sumberdaya Indonesia (DSI), Kompas reported at the time. Coordinating Minister for Economic Affairs Airlangga Hartarto said then that the aim was to prevent under-invoicing, transfer pricing and the flight of export proceeds. According to Kompas, exports of the three commodities were worth about US$66.13 billion in 2025, or 23.4% of Indonesia's total exports.

The Trade Ministry said on 10 November that DSI will become the sole export intermediary for these commodities from 1 January 2027 under Government Regulation No. 24 of 2026, while exporters will still negotiate and sign contracts directly with buyers.

Constitutional argument

Prabowo said the policy follows Article 33 of the 1945 Constitution, which states that the land, water and natural resources are controlled by the state and used for the greatest prosperity of the people, ANTARA reported. "This is not something Prabowo Subianto made up. This is an order from our nation's founders," he said, according to ANTARA.

He said that for decades some holders of plantation rights (HGU), mining permits and industrial forest permits (HTI) had presented themselves as Indonesian citizens when applying for permits but moved their profits abroad, ANTARA and Tirto reported. Prabowo said he would use the rest of his term to correct an economic system he considers to have deviated from Articles 33 and 34 of the Constitution, according to ANTARA and CNBC Indonesia.

An earlier proposal was dropped

The 70% figure has come up before. Earlier this year, several local media outlets, citing Deputy Energy Minister Yuliot Tanjung, reported that officials had discussed a gross split scheme for the mineral and coal sector under which 70% of output would go to the government and 30% to the mine operator, Reuters reported. Bahlil later said in June that the proposal had been dropped after consultations with Prabowo, according to Reuters.

In May, Bahlil said the government was considering patterns used in the oil and gas sector, such as cost recovery and gross split, while keeping the concession system, CNBC Indonesia reported. At the time, Indonesian Mining and Energy Forum (IMEF) chairman Singgih Widagdo urged the government not to rush such a change, saying regulatory certainty matters to investors who compare Indonesia with other countries.

What is not yet known

Beyond the palace's statement that the figure refers to proceeds from managing mining permits, the reports reviewed by NewsWLD did not say whether the 70% would be calculated from revenue, profit or output, which legal instrument would put it into effect, or how it would apply to permits already in operation.