Indonesia Sets Tin as Pioneer Commodity for New Strategic Exchange: A Deep Dive into OJK’s ICOMEX Vision

JAKARTA – In a move aimed at consolidating Indonesia’s position as a global powerhouse in the mineral sector, the Financial Services Authority (OJK) has officially designated tin as the first strategic mineral commodity to be traded on the Indonesia Commodity Exchange (ICOMEX). This landmark decision, announced by Sarjito, the Executive Head of Supervision of Mineral and Strategic Commodity Exchanges at OJK, signals a transformative shift in how the nation manages its natural wealth and seeks to establish price sovereignty on the international stage.

The announcement was made during a high-level working meeting with Commission XI of the Indonesian House of Representatives (DPR RI) in Senayan, Jakarta. The move is not merely a change in trading platforms but a strategic realignment intended to boost market liquidity, ensure transparency, and accelerate the government’s ambitious "hilirisasi" (downstreaming) agenda.

I. Main Facts: Tin as the Vanguard of ICOMEX

The selection of tin as the debut commodity for ICOMEX is a calculated decision rooted in the metal’s long-standing history within Indonesia’s financial markets. While tin has been traded for years on existing platforms like the Jakarta Futures Exchange (JFX) and the Indonesia Commodity and Derivatives Exchange (ICDX), OJK identifies a critical need for a more robust, inclusive, and transparent ecosystem.

A Strategic Choice

Sarjito emphasized that tin’s seniority in the commodities market makes it the ideal candidate for ICOMEX’s maiden operations. Despite its long history, previous trading volumes on the JFX remained relatively modest due to limited participation. ICOMEX aims to break this ceiling by mandating or encouraging broader involvement, particularly from State-Owned Enterprises (BUMN).

The MIND ID Factor

A central pillar of this new strategy is the direct involvement of MIND ID (Mining Industry Indonesia), the state-owned mining holding company. By bringing MIND ID—which oversees major producers like PT Timah Tbk—into the fold, the government ensures a massive injection of liquidity and supply into the exchange. This "big player" approach is expected to attract private domestic and international buyers, creating a vibrant marketplace that reflects the true value of Indonesian tin.

Regulatory Shift

Under the Omnibus Law on the Development and Strengthening of the Financial Sector (UU P2SK), the supervision of certain strategic commodity exchanges has shifted toward OJK. This regulatory migration is intended to provide the commodities market with the same level of oversight, investor protection, and institutional rigor as the capital markets.

II. Chronology: From Fragmented Markets to a Unified Exchange

The journey toward ICOMEX and the prioritization of tin is the result of years of regulatory evolution and economic necessity.

1. The Era of Fragmentation (Pre-2023): For decades, Indonesian tin was primarily traded through the LME (London Metal Exchange), with Indonesia—despite being the world’s second-largest producer—acting largely as a "price taker." Domestic exchanges like JFX and ICDX were established to reclaim price discovery, but participation remained split and often lacked the depth required to influence global benchmarks significantly.
2. The P2SK Mandate (2023): The passage of the UU P2SK redefined the landscape. It granted OJK the authority to supervise strategic commodity exchanges, recognizing that minerals like tin, coal, and nickel are vital to national security and economic stability.
3. The Conceptualization of ICOMEX (2024-2025): OJK began drafting the framework for a dedicated strategic exchange. The goal was to create a "Bourse of Bourses" or a centralized hub that could facilitate B2B (Business-to-Business) transactions with high transparency.
4. The DPR RI Working Meeting (September 2026): In the most recent development, Sarjito presented the roadmap to Commission XI. He confirmed that tin would lead the way, supported by new government regulations that could potentially mandate all domestic tin trading to pass through this exchange to ensure data accuracy and tax compliance.

III. Supporting Data: Indonesia’s Dominance in the Tin Market

To understand why tin was chosen, one must look at the sheer scale of Indonesia’s influence on the global supply chain.

Global Production Rankings

Indonesia consistently ranks as the world’s second-largest producer of tin, primarily sourced from the Bangka-Belitung Islands. According to data from the US Geological Survey (USGS), Indonesia accounts for approximately 20% to 25% of global tin exports. However, for years, the "Indonesian Tin Price" was often secondary to the London Metal Exchange (LME) or the Kuala Lumpur Tin Market (KLTM).

The Liquidity Gap

Sarjito noted that while tin has been on the JFX for a "long time," participation was "limited." Data suggests that while physical exports were high, the volume of derivative trading and secondary market activity within Indonesia did not match the physical output. By involving MIND ID, which controls a significant portion of the country’s tin reserves through PT Timah, OJK expects a 40-60% increase in domestic exchange liquidity within the first two years of ICOMEX’s operation.

Downstreaming Potential

The Indonesian government has been aggressive in its "hilirisasi" policy. The export of raw tin ore is banned, and only refined tin ingots with a purity of 99.9% are allowed for export. ICOMEX is designed to support this by providing a transparent price for domestic industries that use tin for solder, chemicals, and tinplate, thereby fostering a domestic manufacturing base.

IV. Official Responses: A Vision for Transparency and Growth

The OJK leadership and government officials have been vocal about the objectives of this transition.

Sarjito, Executive Head at OJK:

"The exchange will become increasingly crowded because there are many players. Whether they like it or not, they must play on the exchange, so that liquidity will be formed," Sarjito explained during the hearing. He further noted that the government’s effort to involve MIND ID is a "game changer."

He added that the direction of government policy regarding the implementation of ICOMEX is to encourage transparency from the very beginning of operations. "We want a B2B scheme that is clean, transparent, and efficient. This is not just about trading; it is about building an industrial ecosystem."

The Role of Domestic Industry:

Sarjito also highlighted that ICOMEX is not just export-oriented. "Domestic industrial demand will also be very good. This also encourages downstreaming and industrialization while optimizing smelters. For example, we want to see a future where nickel is processed domestically until it becomes electric vehicle batteries, and tin plays a vital role in the soldering of those electronic components."

Commission XI DPR RI:

Members of the parliamentary commission generally welcomed the move but urged OJK to ensure that the transition does not create a monopoly that hurts smaller private miners. They emphasized the need for "fair play" and a system that prevents illegal mining—a perennial issue in the tin sector—from infiltrating the formal exchange.

V. Implications: Reshaping the Global Commodity Landscape

The establishment of tin as the primary commodity on ICOMEX carries profound implications for the domestic economy and the global market.

1. Price Sovereignty and Discovery

By centralizing tin trading in a highly regulated and liquid exchange, Indonesia seeks to become the primary price-setter for tin. If successful, global buyers will look to ICOMEX prices rather than the LME to determine the value of tin contracts. This "price sovereignty" ensures that the profits from price fluctuations benefit the Indonesian economy rather than foreign traders.

2. Accelerating the "Hilirisasi" Agenda

The exchange will serve as a bridge between miners and domestic manufacturers. By providing a reliable domestic price, ICOMEX encourages the growth of the solder industry and electronics manufacturing within Indonesia. As Sarjito mentioned, this model will eventually be applied to nickel, copper, and bauxite, creating a comprehensive "downstream" ecosystem.

3. Increased State Revenue and Transparency

A centralized exchange makes it significantly harder for companies to engage in "under-the-table" deals or transfer pricing. Every transaction on ICOMEX will be recorded, providing the Ministry of Finance with accurate data for calculating royalties and taxes. This transparency is also expected to curb the circulation of tin from illegal or unregulated mines, as the exchange will require strict "provenance" documentation.

4. Smelter Optimization

Indonesia has seen a surge in smelter construction following the raw ore export bans. However, some smelters operate below capacity due to supply chain inefficiencies. ICOMEX will provide a transparent marketplace where smelters can secure raw materials and sell refined products efficiently, ensuring that the billions of dollars invested in smelting infrastructure yield maximum returns.

5. Future Expansion to Other Minerals

Tin is the "test case." The success of tin on ICOMEX will pave the way for other strategic minerals. Sarjito specifically mentioned nickel and its role in the global EV battery supply chain. If ICOMEX can successfully manage the tin market, it will likely move to include nickel, coal, and perhaps even carbon credits, making it one of the most diverse and influential commodity exchanges in Asia.

Conclusion

The OJK’s decision to launch ICOMEX with tin as its flagship commodity marks the beginning of a new era for Indonesia’s mining sector. By leveraging the power of state-owned enterprises like MIND ID and implementing a rigorous regulatory framework, Indonesia is no longer content with being a mere supplier of raw materials. Instead, the nation is positioning itself as a sophisticated financial and industrial hub.

As Sarjito concluded in his presentation to the DPR, the goal is a "virtuous cycle" of liquidity, transparency, and industrialization. If ICOMEX achieves its targets, it will not only stabilize the domestic mining industry but also provide a blueprint for how resource-rich nations can reclaim control over their economic destiny. The world will be watching closely as Indonesia’s tin market moves from the periphery to the center of the global financial stage.