Analysis: DSI and the future of Indonesia’s coal exports: Between state revenue ambitions and industry uncertainty

By: Yudhi Putro – PT Kaldera Energi Nusantara

A sudden and surprising government decision emerged at the end of May 2026: the establishment of PT Danantara Sumberdaya Indonesia (DSI), a special company that will become the sole export entity for natural resource commodities, starting with coal and crude palm oil, effective June 1. This move immediately sent waves of uncertainty throughout Indonesia’s coal supply chain, from mining permit holders and traders to overseas buyers. What exactly motivated this last-minute decision? And how will it affect the industry and the global market? This article attempts to descriptively explain the government’s reasoning, miners’ concerns, and the worries of international buyers.

Government’s point of view: Pursuing additional revenue without regulatory constraints

Looking back, the idea of optimizing state revenue from the coal sector is actually not new. Over the past few months, discussions surrounding export taxes, royalty increases, and coal production-sharing schemes have intensified. The government carefully observed that relatively high coal prices still leave significant room for additional state revenue. The logic is simple: if international selling prices remain high, even though production costs rise due to increasing global oil prices, mining companies are still generating extra profits that the government believes can be tapped for national interests.

However, why did the policy suddenly shift at the last minute toward establishing DSI? In my opinion, the answer lies in differences in fund management mechanisms.

If the government had chosen export taxes or royalty increases, the additional revenue would have entered the state treasury as Non-Tax State Revenue (PNBP). Such funds would first flow into the national fiscal system and then require allocation through the state budget (APBN) mechanism. The process would be relatively complex and lengthy because it must comply with strict regulations, involve parliament approval, and cannot be directly allocated to specific investment projects.

This is where a different strategy was chosen. By establishing DSI as a private company under Danantara (Daya Anagata Nusantara Investment Management Agency), all coal exports are effectively forced through a single gateway. Revenue or profits generated by DSI—whether from price differences between miners and foreign buyers or from fees—will flow to Danantara as dividends or corporate profits.

Its utilization becomes much simpler: Danantara can directly finance national priority investment projects without lengthy approval processes tied to APBN regulations. In simple terms, the government wants an additional slice of coal profits but does not want that “cake” to enter the APBN plate full of procedures. Instead, they want it to go directly onto Danantara’s plate, which is considered more agile and flexible.

The government has also promoted another noble reason: improving governance. Authorities claim to have discovered under-invoicing practices that harmed the state, where exporters reported lower selling prices than actual transaction values to reduce tax and royalty burdens. Additionally, with DSI, Indonesia’s coal selling prices in international markets are expected to become more stable and prevent unhealthy competition among miners.

However, can one super-company really solve classic problems that even multilateral institutions struggle to address? That remains a major question. Equally important, the public and industry players are also waiting to see whether there will be changes or adjustments to mining governance after DSI. Will miners still manage production and logistics independently, or will there be deeper intervention?

Miners’ point of view: Between uncertainty and new burdens

From the miners’ perspective—particularly IUPK and IUP holders who have long been the backbone of Indonesia’s coal exports—the atmosphere is filled with anxiety and concern. Three layers of uncertainty loom ahead.

First is the legal status of miners as exporters. Previously, any mining company holding an Operation Production Mining Business Permit (IUP) could become an independent exporter after receiving approval from the Ministry of Trade. With DSI now requiring all exports to go through a single channel, a fundamental question arises: can miners still retain exporter status? Or will that status be revoked, leaving DSI as Indonesia’s sole coal exporter?

As of the writing of this article, uncertainty still surrounds long-term contracts with buyers in China, India, Japan, and South Korea, although DSI has stated that existing contracts will be honored with adjustments.

Second is the potential for additional costs and workloads. Export sales routed through DSI are expected to create extra layers of costs. Will miners be charged fees? If so, how much? Operational activities such as vessel coordination, shipping, L/C documentation, and price negotiations—previously handled directly between miners and buyers—must now pass through DSI.

This means additional administrative work and potentially duplicated functions. Networking, after all, is one of the most valuable assets in the export business. Opening foreign markets, building buyer trust, maintaining relationships, negotiating contracts, and handling L/C payments are all hard-earned achievements that cannot be created instantly.

If DSI takes over all those functions, then who will actually perform the work? Does DSI possess an experienced marketing team that understands the international coal market?

Third is tighter price control. Through DSI, the government could potentially set benchmark prices or directly monitor every transaction. This poses serious concerns for miners selling coal based on global index formulas and spot prices. The pricing flexibility that has long been central to the business could be significantly reduced.

Given these complexities, most industry players can only wait and see. Many uncertainties from the miners’ perspective are expected to be addressed during the trial period in the coming months, while technical implementation guidelines are being prepared in parallel. Of course, this waiting period is far from ideal for a business that requires contract certainty every week.

Foreign buyers’ point of view: Seeking alternatives amid market stagnation

News about DSI quickly spread among international buyers, both end users and coal traders worldwide. They immediately began recalculating their supply strategies.

They view DSI as a new source of uncertainty. The most critical issue is supply continuity. Can DSI guarantee shipments according to schedules and volumes previously fulfilled by dozens of experienced miners?

If bottlenecks occur within DSI—whether due to administrative problems, document verification, or centralized vessel arrangements—shipping schedules will inevitably be disrupted. For countries such as Japan and South Korea, which rely heavily on just-in-time coal inventories for power plants, even minor disruptions could have severe consequences.

Furthermore, amid slowing global economic growth and energy transition trends that are driving stagnant or declining global coal demand, buyers are becoming increasingly aggressive in diversifying their supply sources.

China and India, Indonesia’s two largest coal buyers, are intensifying domestic production. China has opened new mines in Inner Mongolia and Xinjiang, while India continues pushing Coal India to reduce import dependence. If DSI creates new friction, these two giants may accelerate import substitution.

Meanwhile, countries such as Japan, South Korea, Vietnam, Malaysia, and the Philippines—historically dependent on Indonesian coal—may increasingly turn to alternative suppliers such as Australia, Russia, or South Africa.

It should also be remembered that Indonesia had previously implemented relatively strict production restrictions through the RKAB (Work Plan and Budget) mechanism. The DSI policy now becomes another stumbling block on top of previous ones.

The greatest concern is that Indonesia, long recognized as the king of thermal coal exports, may ultimately undermine itself through regulations that confuse trading partners.

Conclusion: Seeking middle ground between idealism and industrial reality

There is no denying that the government’s intention to maximize returns from natural resources, especially coal, is a positive one. Recognizing revenue leakage through under-invoicing practices and weak governance, then attempting to address it through a single gateway called DSI, sounds conceptually neat.

However, the coal industry is not merely a commodity business. It is an ecosystem involving thousands of workers, contractors, logistics providers, ports, and global networks built over decades.

Thousands of mining workers across the supply chain, who had already experienced the impact of tighter RKAB regulations, now face the DSI policy as well. Concerns are emerging about whether jobs and livelihoods will be affected by changes to the export scheme.

At the same time, Indonesia’s coal competitiveness in international markets—already pressured by global energy transition policies—risks further erosion if additional costs are imposed without clear added value.

More importantly, if trading partners view this policy as an unreasonable trade barrier—for example, because it disrupts existing contracts or creates a purchasing monopoly—there is a possibility of legal challenges at the World Trade Organization (WTO).

Indonesia previously faced similar disputes regarding its nickel ore export ban. Although Indonesia prevailed at the appellate level, the international legal process consumed considerable time, costs, and diplomatic energy.

Ultimately, the success of DSI will depend on whether the government can strike a balance between maximizing state revenue and preserving market efficiency.

Industry participants are hoping that upcoming technical regulations will provide clarity on three key issues: legal certainty for exporters and long-term contracts, avoidance of excessive additional costs, and preservation of market-based commercial mechanisms.

The spirit of “maximizing state revenue” must not ultimately end up “impoverishing the industry and killing exports.”

Now is the time for the government to sit together with mining associations, energy economists, and trading partners to find a fair formula. Because ultimately, coal that cannot be sold will generate no revenue for anyone—neither for the state nor for Danantara.

Editing by Reiner Simanjuntak