Indonesia Creates State Monopoly for Natural Resource Exports with Danantara DSI
President Prabowo's government establishes PT Danantara Sumber Daya Indonesia as the sole exporter of palm oil, coal, and ferroalloys — a sweeping reform that has drawn both industry support and calls for transparency.
Indonesia Creates State Monopoly for Natural Resource Exports with Danantara DSI
In one of the most significant economic policy shifts in recent Indonesian history, President Prabowo Subianto’s administration has established a new state-owned enterprise (SOE) that will become the sole exporter of Indonesia’s palm oil, coal, and ferroalloy commodities. The company — PT Danantara Sumber Daya Indonesia (DSI) — operates under Indonesia’s sovereign wealth fund, Danantara.
What Is DSI?
Announced during a House of Representatives (DPR) plenary session on May 21, the new government regulation designates DSI as the exclusive export channel for some of Indonesia’s most valuable natural resources. The move effectively centralizes export control over sectors that collectively represent tens of billions of dollars in annual trade.
The company is a subsidiary of Danantara, Indonesia’s sovereign wealth fund that was established to manage state assets and drive strategic investments. By placing export authority under Danantara’s umbrella, the government aims to consolidate bargaining power and maximize state revenue from commodity exports.
Leadership and Industry Response
DSI has appointed Luke Thomas Mahony, an Australian national, as its president director. Mahony previously served as senior executive vice president for business performance and optimization at Danantara since September 2025, and held a director position at PT Vale Indonesia before that.
Investment and Downstreaming Minister Rosan Roeslani — who also serves as Danantara CEO — defended the appointment, citing Mahony’s extensive experience in mineral trading and his strong industry connections. “He has led several mineral companies and is well-connected,” Roeslani said, also noting Mahony’s ability to speak Indonesian.
Coordinating Minister for Economic Affairs Airlangga Hartarto reported that industry associations have responded positively to the move. Key stakeholders including the Indonesian Chamber of Commerce and Industry (Kadin), the Indonesian Employers Association (Apindo), the Indonesian Coal Mining Association (APBI), and palm oil industry players have been engaged in discussions.
However, industry actors have urged the government to ensure transparency in DSI’s structure and operations. “What they are asking for are transparency and clarity regarding the SOE,” Hartarto acknowledged.
Exemptions and Nuance
Not all trade partners will be subject to the new framework. The government has confirmed that the United States and partner countries will be exempt from the new foreign exchange rules tied to natural resource exports. This carve-out suggests the policy is designed to maintain critical trade relationships while tightening control over other export destinations.
Additionally, the government is preparing additional rules for Russian oil imports, indicating that the new trade architecture extends beyond exports to encompass broader energy trade policy.
Economic Context
The policy comes amid broader economic maneuvering by the Prabowo administration. The government has set a target for the rupiah to reach Rp16,800–17,500 per US dollar in 2027, and has emphasized a state budget oriented toward public welfare. Indonesia is also pursuing full electrification by 2029.
On the same day as the DSI announcement, the government also revealed a US$20 million methane reduction project launched jointly with South Korea — suggesting that environmental considerations are being woven into the broader resource management strategy.
What’s at Stake
Indonesia is the world’s largest palm oil exporter and one of the top coal exporters globally. Centralizing export authority under a single SOE represents a fundamental restructuring of how these commodities reach global markets. Proponents argue it will improve price negotiation, reduce revenue leakage, and give Indonesia more leverage in international trade. Critics worry about bureaucracy, potential inefficiencies, and the concentration of economic power.
The appointment of a foreign national to lead the company adds another layer of complexity — a pragmatic choice for expertise, but one that will be closely watched in a country where nationalist economic sentiment runs strong.
What Comes Next
The immediate priority is forming a “solid management” team, as Hartarto put it. Danantara’s Roeslani has already begun stakeholder engagement to explain the policy and gather feedback. The real test will come in implementation — how quickly DSI can become operational, how producers adapt to the new export channel, and whether the promised transparency materializes.
For Indonesia’s trading partners, the message is clear: the country is taking a more assertive stance on how its natural wealth is sold to the world.