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Indonesia, home to huge natural resources and a key global commodity player, is set to witness its general elections on Feb. 14. The spotlight is on the top three candidates and how their policy actions could influence commodities that are closely linked to the minerals and energy transition industry.
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The elections come at a very crucial time when Indonesia has doubled down on the nationalization of its resources. An ongoing policy helmed by the current president, Joko Widodo, led to an export ban on raw minerals aimed at promoting higher-value industrialization. Indonesia has already banned exports of nickel, a key material used in building electric vehicle batteries, and that move pushed China to pour investments into the Indonesian mineral processing industry. This policy ban would likely remain largely unchanged due to its public popularity and the investment it has enticed, according to S&P Global Ratings.
Also, Indonesia is a huge market for palm oil, thermal coal, bauxite, and copper. Indonesia has also banned exports of bauxite and partial exports of copper since June 2023. A complete ban on copper will come into effect in June, while a ban on tin exports is also on the radar. There is no material change expected in the operating environment and mining regulations, especially regarding rules on the export of unprocessed ores this year, S&P Global Ratings said.
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