Indonesia Forges New Bullion Association in Bid to Transform Mining Muscle into Regional Gold Trading Hub

JAKARTA, Investortrust.id — Exactly one year after President Prabowo Subianto authorized the commercial rollout of state-backed bullion banking services, Indonesia is moving to formalize its domestic precious metals ecosystem under a unified industry group.

Leading market participants and financial institutions assembled at BSI Tower in Jakarta to inaugurate the Indonesia Bullion Market Association (IBMA). The trade group will function as the overarching institutional body tasked with establishing uniform market governance, deepening liquidity, and aligning domestic refining standards with global trading benchmarks.

The move marks a critical juncture in Southeast Asia’s largest economy as it attempts to redirect its vast resource wealth inward. Despite ranking among the world's top ten gold-mining nations, Indonesia has long exported raw or semi-refined metals while leaving lucrative trading, clearing, and derivative financing to foreign centers like Singapore and London. Jakarta now intends to retain that value chain entirely at home, integrating physical repositories with sovereign financial markets.

Building on 177 Tons of Custodial Gold

The launch follows a swift operational ramp-up since bullion banking received initial executive backing in late February 2025. Over the past twelve months, the nation's two licensed bullion institutions have amassed custody over approximately 177 metric tons (about 195.1 short tons or 5.69 million troy ounces) of vaulted gold.

State-owned pawnbroker PT Pegadaian holds the dominant share, managing roughly 153 metric tons (168.7 short tons), while PT Bank Syariah Indonesia Tbk (BSI)—the nation’s flagship Islamic lender—accounts for 24 metric tons (26.5 short tons).

President Prabowo spotlighted the system's rapid traction during his annual state-of-the-nation address before the People’s Consultative Assembly (MPR) on August 14, 2026, characterizing domestic bullion banks as a vital strategic mechanism to insulate national wealth, fortify the sovereign banking sector, and extract higher returns from primary resources.

"Indonesia holds massive gold reserves," Coordinating Minister for Economic Affairs Airlangga Hartarto said during the association's unveiling ceremony on Thursday (20/8/2026). "Our strategic imperative is not merely ramping up mine extraction, but ensuring this gold is managed and monetized within our own borders to generate broader multiplier effects across the real economy. IBMA will serve as the indispensable catalyst bridging commercial competition with unified market governance."

An Integrated Value Chain

The association spans a diverse membership across the supply chain, incorporating state miners, private refiners, retail mints, Islamic lenders, non-bank financiers, and physical trading desks.

Key founding constituents include PT Amman Mineral Internasional Tbk (AMMN), PT Hartadinata Abadi Tbk (HRTA), PT Central Mega Kencana (the retail jewelry operator behind Mondial and Frank & co.), UBS Gold, Galeri 24, PT Sentral Kreasi Kencana (SKK Jewels), PT Laku Emas Indonesia, physical commodities infrastructure provider ICDX Group, and logistics operator Brink's Solutions Indonesia.

The executive leadership will be steered by Pegadaian Director of Marketing, Sales, and Product Development Selfie Dewiyanti as Chairman, partnered with BSI Director Anton Sukarna serving as Secretary General.

"The IBMA platform provides our market the single standard-setting body it historically lacked," Dewiyanti stated in a formal briefing on Friday (21/8/2026). "With this infrastructure, Indonesia is positioning itself to transition from a pure raw-material exporter into a credible, competitive bullion trading and financial services hub across Southeast Asia."

The association will base its administrative operations and executive boardroom on the second floor of Pegadaian Tower in central Jakarta, leveraging the facility's existing bullion vaulting units, certified grading laboratories (G-Lab), and trading terminals.

Linking Mining Wealth to National Growth Targets

The bullion market expansion forms a strategic pillar of the administration's broader Asta Cita policy blueprint, which targets 8% annual economic expansion by 2029 through aggressive domestic mineral processing and financial deepening.

According to data compiled by the World Gold Council, Indonesian domestic mine output reached 104 metric tons (114.6 short tons) in 2025, securing the nation's position as the world's tenth-largest gold producer. The expansion coincides with sustained global appetite for physical bars and gold-backed exchange-traded funds (ETFs), which have hovered near decade-high levels amid macroeconomic uncertainty.

By tying certified local vaulting directly to structured financial instruments—including gold-denominated savings accounts, retail collateral loans, exchange-traded products, and sharia-compliant trade financing—regulators aim to unlock idle domestic capital, minimize offshore settlement dependencies, and deepen overall liquidity across Indonesian capital markets.