Higher mining output ahead. On 8 June, Energy Minister Bahlil stated that the government is reviewing the mining output plan, especially for coal which was initially cut sharply. Previously, the Energy Ministry cut the mining output plan for coal by 24% to 600mn tons in 2026 from 790mn tons last year, and by 34% for nickel to 250mn tons from 379mn tons previously. While the objective is understandable, initially to push up prices, the Iran War has added an additional premium to overall commodity prices, which should allow miners to increase output while maintaining elevated prices. Raising the production quota for key commodities could improve both external and fiscal balances given the large share of commodity-related exports and revenues. Of total exports, about 52% come from commodities, while about 20% of government revenue is commodity related, including royalty and corporate income tax from commodity sectors.

Grabbing the windfall. We examine the sensitivity of non-tax fiscal revenue from mining and export revenue to changes in mining output across four key commodities: coal, nickel, copper, and gold. A 10% increase in mining output is associated with a ~31pp lift in non-tax fiscal revenue growth and ~15pp in export revenue growth, with the steeper fiscal revenue slope reflecting the direct linkage between royalties, dividends, and production value (Exhibit 1). Despite the stronger growth rate sensitivity, the GDP-level impact is larger on the export side, given the much larger base. Mining export revenue in 2025 (IDR684.9tn, 2.9% of GDP) is roughly 5.3x the size of mining non-tax fiscal revenue (IDR130tn, 0.5% of GDP), meaning the larger base more than offsets the lower slope. In aggregate, a 10% increase in mining output could add approximately 0.2% of GDP in additional fiscal revenue and 0.5% of GDP to the current account by our estimate.