Indonesian Minerals Policy

Indonesian Minerals Policy


Operating in the Indonesian mining sector has the potential to be very profitable, but the unpredictable regulatory environment since 2009 has seen the industry decline significantly. An investment bank was concerned that the unpredictable regulatory environment would have a negative impact on their investments. Our client sought to understand how to revive investor interest in Indonesia’s abundant metals reserves. sarmat was hired to conduct a comprehensive assessment of Indonesia’s Minerals Policy.

Our Approach

Based on our founders previous experience in policy research within Indonesia, we began by provided a brief on mining legislation and policies in Indonesia, before and after the period of national and regional transition. We examined the regulatory rollercoaster since 2009 and the controversial 2014 ban on unprocessed metals and mineral ore. Finally we assessed the reactions of foreign investors that have exited Indonesia by selling their project stakes to domestic companies.


The client used the market insights that sarmat generated to adjust their investment position.

We confirmed that a relaxation of the controversial 2014 ban on unprocessed metals and mineral ore had not incentivised downstream processing and that with Indonesian economic growth slowing, an investment opportunity to take advantage of a boost in exports emerged.

It would be a mistake to think that the government’s latest regulatory changes will signal the start of the recovery of the Indonesian mining industry as a whole. Recovery will very much depend on the commodity in question.