Indonesia proposes to set its own reference price for minerals, and the exchange announced for 2027 is where that valuation would be made

President Prabowo Subianto delivered the 2027 draft state budget and its financial note to the House of Representatives on 14 August 2026. Within a speech that covered food, energy, education, health, and industrial policy, one proposal speaks directly to how Indonesia values what it takes out of the ground. The government intends to establish a National Mineral and Strategic Commodities Exchange, operating from 1 January 2027, under the supervision of the Financial Services Authority, with the stated purpose of building an Indonesia Reference Price for the country's principal export commodities.

The commodities named span the resource and agricultural economy: palm oil, nickel, tin, coal, gold, coffee, and rubber. The design intent, as described, is to bring producers, farmers, exporters, buyers, and investors into a single supervised system where transaction data is visible and the room for manipulation narrows.

A pricing proposition, stated plainly

The President framed the problem in terms that are unusual for a budget address in their directness about valuation.

Too often the price of the wealth that comes out of Indonesian soil and Indonesian labour is determined abroad, on foreign commodity exchanges, against benchmarks we did not form ourselves.

That sentence describes a condition Indonesian resource policy has been circling for years. Indonesia is among the world's largest producers of nickel, tin, and thermal coal, and a significant producer of gold, bauxite, and copper. It is not, in most of those markets, the place where the price is discovered. Benchmarks form on exchanges and in assessment processes located elsewhere, and Indonesian producers, and the Indonesian state as royalty collector, take those numbers as given.

The exchange proposal is an attempt to change where the number comes from. Supervision would sit with the Financial Services Authority rather than with a sector ministry, which places the institution in the financial-market regulatory perimeter rather than the mining one. The President asked the House of Representatives to move quickly on the implementing rules so the 2027 operating target can be met.

The budget the proposal sits inside

The figures around the announcement give it scale. The 2027 draft budget proposes total state revenue of Rp3,426.0 trillion, against Rp3,153.6 trillion in 2026, with spending of Rp4,097.2 trillion and a deficit of 2.40 percent of gross domestic product, narrowing from 2.68 percent. Tax and customs revenue is targeted at Rp2,908 trillion, made up of Rp2,591.4 trillion in tax and Rp316.6 trillion in customs and excise.

Non-tax state revenue is the line that matters most for the resource sector, and it is proposed at Rp517.4 trillion, a decline of 10.03 percent from the 2026 outlook of Rp575.1 trillion. Finance Minister Purbaya Yudhi Sadewa attributed the reduction largely to a more conservative Indonesian crude price assumption than current world levels.

For minerals and coal specifically, the 2026 non-tax revenue target was set at Rp113.389 trillion, an increase of around 7.3 percent on the 2025 outlook though below the Rp124 trillion targeted for 2025, with the increase resting substantially on the royalty tariffs introduced under Government Regulation No. 19 of 2025. Hendra Sinadia of the Indonesia Mining Association and Gita Mahyarani of the Indonesian Coal Mining Association both noted at the time that commodity price movement, rather than volume, would be the determining variable.

That is the point at which the exchange proposal stops being abstract. A royalty is a percentage applied to a price. If the price is set elsewhere, the state's revenue from its own minerals moves with a benchmark it does not administer. Downstreaming and industrialisation appear as the fifth of the eight priority focuses in the national priority work programme accompanying the budget, and the exchange is the pricing instrument that would sit alongside them.

Why a reference price is a valuation question

Sirkularium reads this as a valuation development rather than a trading one. A reference price is not simply a number that appears on a screen. It is the output of a methodology: what grades are covered, how moisture and impurity are treated, what settlement terms are assumed, which transactions qualify as representative, how thin trading periods are handled, and who audits the inputs.

Indonesia has been building pieces of this for some time. The benchmark price formulas for nickel and bauxite were revised in 2026 to account for iron, cobalt, and chromium content in nickel ore and reactive silica in bauxite, and the unit of account moved from dry metric tonne to wet metric tonne. Monthly reference prices for coal and metals are already published and already determine royalty bands. An exchange would not replace that work. It would give it a transaction record to calibrate against, which is the part that has been missing.

The same logic extends to the part of the resource ledger Sirkularium works on most closely. A reference price makes the mineral measurable. It does not by itself make the land, water, and ecosystem position behind the mineral measurable. Both are valuation problems, both have established methodologies, and only one of them is about to get a national institution.

What has to be built before January 2027

The timeline is short. Between the announcement and the target operating date sit the implementing regulations, the market rules, the participant requirements, the delivery and warehousing arrangements for physical settlement, and the supervisory apparatus within the Financial Services Authority. For a reference price to function as a benchmark rather than as an indicator, it needs liquidity, and liquidity needs participants who find it more attractive to transact on the exchange than around it.

There is also the question of what the exchange does for producers who currently sit outside formal price discovery entirely. Community tin producers in Bangka Belitung, artisanal gold operations moving toward people's mining permits, and smaller coal and mineral operators all transact at prices that are negotiated rather than referenced. An exchange that eventually reaches them would do more for measurable value in the resource sector than one that serves only the largest exporters.

Sirkularium's view

This is a constructive proposal and a serious one, and the decision to place supervision with the Financial Services Authority suggests the government intends it to be treated as market infrastructure rather than as an administrative price list. For government and public institutions, Sirkularium offers three observations.

First, the credibility of an Indonesia Reference Price will rest on methodology and governance, not on the volume traded in its first year. Publishing the calculation rules, the qualifying transaction criteria, and the audit arrangements before launch would do more for the benchmark's standing than any opening day figure.

Second, the exchange should be understood as one instrument within a wider valuation architecture that Indonesia is assembling piece by piece: benchmark price formulas, royalty bands, the national reclamation cost standard, and the environmental economic loss methodology under Permen LH No. 7 Tahun 2014. These are separate instruments serving one purpose, which is to make the value of Indonesian resources measurable in rupiah at every stage. Coordinating them explicitly would compound their effect.

Third, the ecosystem side of the ledger deserves the same institutional attention the price side is now receiving. A mineral with a well governed reference price and an unmeasured environmental position is still only half valued. Remote sensing and GIS make land cover change and reclamation extent measurable on a repeatable schedule, ecosystem services valuation attaches figures to water, biodiversity, soil, and carbon, and the national methodology for pricing ecological damage already exists. What is missing is the habit of running these as standing practice rather than reaching for them after a dispute.

For operators, the near-term implication is practical. A more transparent price environment raises the standard of evidence expected in every direction, including from the Ministry of Environment and Forestry. Companies that already hold an independently verified valuation series covering their land, water, and ecosystem position will find the coming period easier than those assembling that evidence later.

What to watch next is the implementing regulation, the list of commodities in the first trading tranche, and whether the reference price methodology is published openly enough for producers and the state to calculate alongside it.