A total of 12,607 abandoned tin-mining pits remain unreclaimed across the Bangka Belitung Islands, stretching across approximately 15,579.7 hectares of scarred land. This wounded landscape stands as a stark reminder of the region’s position as a contributor of nearly 20 percent of the world’s total tin supply. Amid this troubling ecological reality, the central government in Jakarta is pursuing an ambitious goal: taking greater control of the global mineral market.
On 14 August 2026, President Prabowo Subianto officially announced the strategic plan to establish the Mineral and Strategic Commodities Exchange. The exchange, targeted to begin operations on 1 January 2027, will operate under the supervision of the Financial Services Authority (OJK). The initiative is designed as a key foundation for establishing an Indonesia Reference Price for the country’s leading export commodities.
For the ResponsiBank Indonesia Coalition—an alliance of 16 civil society organizations (CSOs) that is part of the global Fair Finance Asia and Fair Finance International networks—the government’s move is considered highly strategic for strengthening Indonesia’s bargaining position globally. However, the coalition warns that becoming merely a price setter must not be the ultimate goal. As a major mineral-producing country, Indonesia also has a moral and ecological responsibility to become a standard setter for critical mineral governance.
“If Indonesia wants to become a price setter, the question is not only who determines the price, but also what kind of mineral is being priced,” said Victoria Fanggidae, Coordinator of the ResponsiBank Indonesia Coalition and Executive Director of PRAKARSA.
She emphasized that Indonesia’s strategic position must be used to help determine standards for how minerals are mined, processed, financed, and traded responsibly. According to her, this must be accompanied by stringent sustainability safeguards to minimize environmental and social risks.
The Dark Trap of “Supply Chain Laundering”
The urgency of implementing stringent standards becomes particularly evident when looking at the realities of mineral supply chains on the ground. A 2026 study initiated by The PRAKARSA together with WALHI Bangka Belitung—as part of ResponsiBank Indonesia’s work—uncovered the phenomenon of “supply chain laundering” in the tin sector. This troubling practice occurs when tin extracted from illegal mining operations and activities that fail to meet environmental standards is nevertheless able to seamlessly enter formal supply chains.
Existing audit and certification systems are considered to rely too heavily on administrative compliance. This superficial approach has proven insufficient to reliably detect the mixing of illegally sourced minerals into legitimate markets.
“Large-scale production, exports, and state revenues are not sufficient measures of success,” said Ari Wibowo, Senior Researcher at The PRAKARSA. He urged the country to critically examine who benefits and who bears the social and environmental costs.
“Communities living around mining areas cannot simply be described as bearing the externalities without addressing the sacrifices they make as a result of these mining practices,” he added.
Given these significant gaps, transparency within the new exchange must not be limited to transaction values. It must be expanded to include supply-chain transparency and corporate accountability. A robust traceability system is essential to enable minerals to be traced back to their origins, including specific mining locations and processing facilities.
Furthermore, the traceability system must connect information on the mineral’s origin with the legality of the operation, while verifying the extent to which environmental, social, labor, and human rights standards have been met.
“Traceability should not stop at asking which mine the mineral came from. The system must also be able to show whether environmental, social, and human rights standards have been met,” Ari stressed.
Aligning Trading Standards with the Financing Pipeline
In building this comprehensive governance framework, the role of OJK becomes particularly critical. The institution will not only oversee the exchange but also has the authority to regulate financial entities that provide financing to mining companies, smelters, and other businesses across the mineral value chain.
Ari Wibowo stressed that trading standards and financing standards must not operate independently; they must be aligned.
“It is not enough for minerals entering the exchange to be required to meet certain standards while banks and financial institutions can still finance business activities that fail to meet those same standards,” he explained.
However, environmental and social due diligence alone is not sufficient. Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia and a member of the ResponsiBank Indonesia Coalition, also highlighted gaps in financial transparency.
He emphasized that financial institutions must require beneficial ownership disclosure and transparency regarding companies’ payments to the state—including royalties, non-tax state revenues (PNBP), and other tax obligations—as key components of financing due diligence.
Without these safeguards, financing can continue flowing to companies that conceal their actual ownership structures or refuse to disclose their contributions to state revenues, even when they appear to meet environmental and social standards on paper.
“We must not allow profit shifting and tax avoidance to take place behind the scenes,” Aryanto warned.
Demanding Land Justice and Inclusion of Vulnerable Groups
Ultimately, efforts to improve critical mineral governance will never be complete without addressing justice in land ownership and use (land use justice). Many mining areas and smelter facilities directly overlap with Indigenous lands, agricultural areas, and spaces that sustain local livelihoods. Therefore, the principle of Free, Prior and Informed Consent (FPIC) must be treated as a fundamental requirement before industries are granted access to land, rather than merely as an additional document.
At the same time, the burdens and impacts of mining activities are often experienced disproportionately. Women, persons with disabilities, and other vulnerable groups are frequently marginalized and treated merely as affected parties rather than being included in decision-making processes.
Aryanto therefore called for grievance mechanisms, compensation schemes, and post-mining land restoration programs to be carefully designed to be gender-responsive and disability-inclusive. These measures should be based on “impact and benefit-distribution data disaggregated by gender and other vulnerable groups,” he added.
As a roadmap for improving governance, the ResponsiBank Indonesia Coalition strongly urges regulations governing the Mineral and Strategic Commodities Exchange to ensure five fundamental principles:
- Ensure full mineral traceability from mining sites through to trading.
- Establish stringent environmental and social safeguards.
- Require responsible sourcing and thorough due diligence by corporations.
- Ensure transparency of beneficial ownership information and supply chains.
- Integrate these governance standards into the financing policies of financial institutions.
Ultimately, the ambition to control mineral prices means little without a commitment to responsible resource governance.
“An Indonesia Reference Price must have an Indonesia Responsible Mineral Standard behind it,” Victoria Fanggidae concluded.
“Without traceability, due diligence, and strong environmental and social standards, we are merely moving the place where prices are determined without improving supply-chain governance.”
Source: Ekuatorial