I. Indonesia's Position in the Global Tin Supply Landscape
Tin prices have risen sharply since 2026. Apart from the attention premium driven by AI computing power demand amplifying the phased gains, the tight supply balance has remained unchanged, continuing to provide bottom support for prices: limited global mine-side growth and frequent supply disruptions have been the main thread running through the market fundamentals all year. Among these factors, changes in Indonesia have been particularly critical—the country contributes approximately 12% of global tin ingot supply and is the world's second-largest primary tin producer after China.
Indonesia prohibits the export of tin ore and processed tin concentrates, allowing only tin ingot exports, and all tin ingot exports must be completed through two exchanges: the Jakarta Futures Exchange (JFX) and the Indonesia Commodity and Derivatives Exchange (ICDX). Transaction data from these two exchanges have therefore become a high-frequency indicator for tracking Indonesian tin ingot exports, useful for export volume verification and source tracing.
From January to August 2026, JFX and ICDX combined traded 25,830 mt of tin ingots, compared with 31,565 mt in the same period last year, a YoY decrease of 18.17%. This decline was notably lower than market expectations for Indonesian supply at the beginning of the year, which is also why the market has continued to focus on changes in Indonesian supply. The following sections break down the causes of this round of export pullback from three dimensions: institutions, implementation, and market structure.
II. RKAB: The Core Variable for Indonesian Tin Supply in 2026
2.1 The RKAB System
The most significant institutional variable behind the export pullback is the adjustment to the RKAB approval system. In terms of its operating mechanism, RKAB (Rencana Kerja dan Anggaran Biaya, or Work Plan and Budget) is an annual document that Indonesian mining enterprises submit to the Ministry of Energy and Mineral Resources (ESDM, hereinafter referred to as the "Ministry of Energy and Mineral Resources") in accordance with Mining Law No. 3 of 2020. It covers the year's mining plans, production targets, and the composition of ore/concentrate sources, and upon approval forms the annual cap on total production and procurement (measured in mt Sn). Enterprises must use the approved quota to apply for an export permit (PE, Persetujuan Ekspor).
RKAB is approved on a per-license basis, with the Mining Business License (IUP, Izin Usaha Pertambangan) as the unit. Self-mined ore and externally purchased ore are combined into the same quota, and once the quota is exhausted, no further production or procurement is permitted for the year.
2.2 2026 Approval System Reform: Reverting from Three-Year to One-Year Terms, Previous Quotas Invalidated
It was precisely within this framework that a major adjustment to the approval cycle occurred in 2026. According to Ministerial Regulation No. 17 of 2025 issued by the Ministry of Energy and Mineral Resources on October 3, 2025, RKAB approvals were reverted from three-year terms back to one-year terms starting in 2026, meaning that production and export quotas for 2026 needed to be re-approved. The 2026 production quotas previously approved under the 2024–2026 three-year scheme have been revoked, and enterprises must resubmit annual RKABs.
2.3 Policy coordination between the reform and the crackdown on illegal mining
The adjustment of the approval cycle is not an isolated arrangement; it works in tandem with three concurrent regulatory priorities:
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Traceable sources: Annual approvals make it easier for the government to verify resources, reserves, production records, and externally purchased sources in IUP mining areas on a yearly basis, fulfilling the requirement for traceable ore sources.
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Alignment with the cooperative model: Government Regulation No. 39 of 2025 opens mining participation channels to cooperatives, allowing community miners to obtain legal operating status through the Red-and-White Village Cooperative (Kopdes) and be integrated into the licensed enterprise system.
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Support for the crackdown on illegal mining: Annual approvals combined with source traceability squeeze the operating space of the gray chain of "unlicensed mining—middlemen—private smelters."
Overall, the policy objective of the reform is to bring previously scattered capacity, purchasing, and export activities that operated in gray areas under a unified system of annual approvals and source traceability.
2.4 Approval and implementation progress during the year
The institutional transition produced significant time lags in actual implementation, which were released progressively along the timeline:
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January–March: While new quotas were still under approval, enterprises received temporary quotas equal to 25% of their 2026 quotas under the original three-year plan to sustain Q1 production.
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April 1: Only enterprises that had obtained new quotas could continue production; those not yet approved suspended operations.
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Approval pace: Major enterprises accounting for about 70% of market supply were approved first in April–May, while about 30% of small and medium-sized enterprises were approved only gradually by late June.
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Export licensing overlay: Even after obtaining an RKAB, enterprises still needed to apply for a PE before exporting; most small and medium-sized enterprises only gradually resumed production and exports by July.
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Other factors: Some equipment maintenance in H1 limited production at midyear.
These overlapping time lags were the direct cause of the 18.17% YoY decline in exchange exports in January–August.
III. Crackdown on illegal mining intensified simultaneously
If the RKAB re-approval tightened the scope of legal supply from the institutional side, the concurrent enforcement against illegal mining compressed the space for gray supply from the execution side; the two moved in the same direction. Seizure operations in 2026 ran throughout the year:
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In January, the navy and customs seized about 25 mt of suspected smuggled tin ore in waters south of Bangka.
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In February, two tin sand smuggling cases totaling about 27 mt were uncovered in Belitung.
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In May, the navy intercepted 16 mt of tin sand at a warehouse in Tangerang that had been transported from Sumatra to Java.
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On August 2–13, the navy seized 75.7 mt of tin sand in a special operation in East Belitung, with an estimated case value of about 76 billion rupiah; the National Police's criminal investigation unit subsequently seized another 28 mt at a local warehouse.
Indonesian navy data show that cumulative maritime enforcement seizures of illegal minerals in 2026 reached 514.1 mt, up from 343.14 mt in the same period of 2025. On August 14, President Prabowo, in his annual joint address to parliament, ordered the Ministry of Finance to thoroughly investigate the role of the customs system in the tin smuggling chain and instructed the Maritime Security Agency (Bakamla) to strengthen monitoring of smuggling routes.
The actual scale of smuggling is difficult to measure precisely, but judging from the frequency of seizures, the full-chain enforcement coverage spanning "mining areas—domestic transport—exit ports," and public statements at the presidential level, enforcement against illegal mining in 2026 has clearly strengthened compared with previous years, and gray supply channels have correspondingly narrowed.
IV. Compliance channels for community mining and absorption bottlenecks
4.1 Community mining: the supply source of illegal mining and smuggling
To understand the targets of the illegal mining crackdown, one must return to the source of ore supply—community mining. Bangka Belitung is home to a large number of scattered individual artisanal mining operations; those without legal operating status or operating outside IUP mining areas constitute illegal mining. This ore cannot enter legal domestic sales channels and can only flow through middlemen to private smelters or be smuggled directly out of the country—precisely the main source of the seizures and smuggling described above. The government's approach is therefore not simply to block, but to build a compliant exit channel for community mining while cracking down.
At present, this channel mainly relies on the Red-and-White Village Cooperative (Kopdes) model introduced by Government Regulation No. 39 of 2025: cooperatives serve as the organizational vehicle for community miners, obtain legal operating status within a cooperation framework with IUP holders, and deliver the ore they mine to those IUP holders, thereby being incorporated into a licensed, traceable system.
4.2 Concentration on the purchasing side and dual constraints of volume and price
Whether the compliance channel can absorb community mining depends on the purchasing side's capacity, and the current landscape shows a pattern of "dispersed mining, concentrated purchasing." In 2026, quotas generally arrived late; most small and medium-sized enterprises were approved only after June and were largely unable to absorb supply in H1. The state-owned tin company PT Timah Tbk (IDX: TINS, hereinafter "PT Timah" or "Timah") thus became the main compliant purchaser: it holds 127 IUPs covering a mining area of about 473,000 hectares across Bangka, Belitung, and Kundur Island, accounting for nearly 90% of the total mining area in Bangka Belitung Province, making it the entity with the strongest mining reserves and the most complete compliant purchasing system. However, purchase volumes are constrained by RKAB quotas and subject to explicit ceilings, forming a "volume" cap.
On the "price" side, there is also a mismatch. International tin prices stayed high in 2026, and community mining enthusiasm rose markedly, but compliant purchase prices are determined by established mechanisms and do not adjust in sync with international tin prices; the lag in price adjustments and the high concentration of compliant buyers make it difficult for some mined ore to be absorbed immediately through compliant channels. The mismatch between expanding mining willingness and lagging absorption capacity leaves incentives for smuggling and creates real pressure for policy adjustment.
4.3 Contradictions transmitted to the policy side
As a result, a pair of continuously tightening contradictions has formed on the mining side: on one hand, stronger regulation keeps compressing gray channels, requiring community mining to be absorbed uniformly through compliant entities; on the other hand, compliant purchasing is constrained by concentrated buyers, quota ceilings, and lagging pricing, and cannot keep pace with the ore being released. "Mining can be controlled, but capacity cannot be absorbed," and some ore is still forced into illegal outflows. When this contradiction accumulates to the point that even the main purchasing channel cannot absorb supply, it directly forces policy adjustments (see Part V).
V. August presidential decree: PT Timah granted one-year temporary purchasing authorization
5.1 Why PT Timah was chosen
The direct trigger for the authorization was PT Timah's own quota emergency in the Belitung region: its 2026 RKAB quota for Belitung had been fully exhausted, and a regular quota revision would take 6–7 months, making it difficult to resolve the purchasing standstill in time. More critically, Belitung lacks other compliant purchasers with sufficient capacity, so quota exhaustion essentially meant a wholesale halt in community mining purchases, putting miners' livelihoods under pressure. The contradiction ultimately erupted in a conflict in Gantung Subdistrict, East Belitung Regency, on August 7, during which PT Timah's local offices and storage facilities were attacked, and the company subsequently declared force majeure. This incident became the direct catalyst for accelerating the temporary authorization.
5.2 Authorization content and accompanying price adjustment
On August 14, 2026, President Prabowo signed a one-year presidential regulation (Perpres) authorizing PT Timah to purchase tin ore produced by community miners beyond its existing RKAB quotas; on August 18, Coordinating Minister for Law, Human Rights, Immigration, and Corrections Yusril Ihza Mahendra chaired an inter-ministerial coordination meeting to confirm the policy, clarifying that it is a transitional arrangement pending the formal issuance of a tin industry presidential regulation. The authorization is currently granted only to PT Timah and has not yet been extended to other smelters.
Alongside the authorization, PT Timah on August 14 raised the purchase price of SN70 tin sand from 180,000–200,000 rupiah/kg to 300,000 rupiah/kg, and eliminated intermediaries by paying miners directly to shorten settlement cycles. This adjustment both responded to high international prices and corrected the previous deviation of compliant purchase prices from international prices.
5.3 Key follow-up points
The temporary authorization lasts one year and is a transitional arrangement. Key items to track going forward include the formal number and full text of the presidential regulation; progress within the year on PT Timah's RKAB revision and the completion of technical procedures related to IUPs and cooperatives; whether the temporary authorization will be converted into a formal system after expiration and whether the scope of authorized purchasers will be expanded; and progress on the community mining reference pricing mechanism (HPM).
VI. Market outlook
Future assessments of Indonesian supply need to distinguish among three types of players: the state-owned leader, major private smelters, and small and medium-sized private smelters.
The state-owned leader PT Timah, as the industry's driving and pilot enterprise, is expected to see its H2 production pace accelerate as mining-side resource replenishment progresses. During the temporary authorization period, the company first needs to complete the tallying and planning of new quotas, and while opening up community mining purchases, assess the effectiveness of this arrangement in curbing ore outflows and gauging the actual scale of informal mining. More broadly, Indonesia's previous annual production plans were mainly determined based on resource reserves and enterprises' basic production capacity; in the future, community mining supply conditions may be incorporated into overall production planning.
However, community mining participation cannot be opened up without limits, and how resources are allocated will be the core observation point. Given the policy goals of resource conservation and encouraging downstream localization, if mining and smelting are over-liberalized while domestic downstream consumption cannot keep pace, surplus supply will still be released in the form of exports and push export volumes higher, which is inconsistent with the direction of extending the domestic industry chain and promoting downstream localization.
Under this framework, the more likely path is "state-owned enterprise pilot first, major private enterprises to follow"; before the policy direction becomes clear, small and medium-sized private miners and smelters will most likely maintain their current status, and mining constraints will be difficult to fundamentally reverse. Overall, the main contradiction in Indonesian tin supply is shifting from approval delays at the start of the year to "rebalancing the pace of compliance integration and the speed of community mining release." In H2, PT Timah's progress in obtaining supplementary quotas and implementing purchases will be the key variable for observing the slope of Indonesia's actual export recovery.
![The most-traded SHFE tin contract consolidates, spot market trading limited [SMM tin midday review]](https://imgqn.smm.cn/usercenter/bYFQn20251217171752.jpg)
