Indonesian President Prabowo Subianto has called for the government to receive a much larger share of the financial benefits generated by the country’s mining industry. Speaking to members of Muhammadiyah, one of Indonesia’s largest Islamic organisations, Prabowo said at least 70% of the benefits from mining permits should go to the state. He also said the government should be prepared to take controlling stakes in mining assets if necessary. The proposal signals a stronger approach toward state involvement in a sector that plays an important role in Indonesia’s economy and attracts major international investment.
Prabowo said Indonesia remained open to foreign investors, but argued that the country’s natural resources should provide greater benefits to its own population. The presidential palace later clarified that the 70% figure referred to proceeds from the management of mining permits.
The announcement follows earlier discussions about changing how revenue and production from the mineral and coal industries are divided between the government and mining operators. A similar proposal had been considered earlier in the year but was later dropped after consultations. It remains unclear how the latest announcement will be implemented or whether existing agreements with mining companies will change. The proposal could become an important issue for investors assessing Indonesia’s future mining and resource policies.
