Rosan Roeslani, CEO of Indonesia's sovereign wealth fund Danantara, recently said that the newly established PT Danantara Sumber Daya Indonesia (DSI) aims to boost the country's foreign exchange reserves. He noted that the longstanding practice of under-invoicing by exporters has led to substantial export proceeds remaining overseas, resulting in lost tax revenue for the state. Under-invoicing refers to declaring a value lower than the actual transaction price. Aligning with governance, transparency, and accountability principles advocated by the OECD, the measure also helps cut off illicit financial flows.
According to Rosan, DSI will operate in two phases. Phase one, from June 1 to December 31, 2026, will see the company only verify sales invoices and act as an intermediary between buyers in export markets and Indonesian sellers. Phase two begins in January 2027, when DSI will directly purchase commodities and sell them to global markets. Exporters must sell their goods to DSI before shipment, curbing under-invoicing and aiming for "zero under-invoicing, zero transfer pricing."
Danantara's chief investment officer, Pandu Patria Sjahrir, said the establishment of DSI was a direct directive from the president to strengthen national export governance. DSI's core functions include enhancing transparency and reporting systems for strategic commodity transactions, ensuring accountability and market-reflective pricing. The three initial commodities targeted are coal, crude palm oil, and ferroalloys. DSI is also expected to optimize foreign exchange management from exports, addressing a long-standing situation where most forex earnings have not effectively supported the national economy.
However, the policy has raised concerns among some mining industry players. A mining company owner, when asked, said details of the policy remain unclear, with two main concerns. First, working capital. Purchasing and exporting 555 million tonnes of coal annually in Indonesia requires around $31 billion in funding, which demands rapid turnover -- continuous payments to producers must be made while overseas buyer payments may be delayed. This alone could create a funding gap of tens of billions of dollars. Danantara, as a newly established entity, has no experience managing such large-scale working capital. Second, coal blending. Indonesian coal varies significantly in calorific value and quality, and major buyers such as China, India, and Japan typically order specific specifications. Coal blending is not simply mixing; it requires physical facilities, technical expertise, and long-term contracts with specialized terminals -- capabilities that cannot be built within six months. The business owner noted that whoever holds the exclusive right to export commodities such as coal, crude palm oil, and iron ore controls the flow of hundreds of billions of dollars worth of goods annually, representing an enormous concentration of economic power.
Written by Cora Ji, jiruyan@mysteel.com
