Indominco seeks to raise coal output, eyes 10-year mining permit extension
Thursday, September 25 2025 - 08:49 AM WIB
By Tri Subhki R
PT Indominco Mandiri (IMM), a subsidiary of IDX-listed coal producer PT Indo Tambangraya Megah Tbk (IDX: ITMG), is seeking government approval to revise up its annual coal production target from 6.9 million tons to 8 million tons through 2026, citing improved mining sequences and stronger output potential.
“Our approved three-year RKAB [Work Plan and Budget] for 2024–2026 is 6.9 million tons, but our current projection shows we can produce up to 8 million tons,” said Eddy Susanto, Mine Head at Indominco Mandiri, during a media visit in Bontang, East Kalimantan, on Wednesday (Sept 24).
IMM produced 7.35 million tons of coal in 2024 and expects to produce 7.3 million tons in 2025 and 8 million tons in 2026. However, output is projected to decline to 7.1 million tons in 2027 as coal reserves begin to diminish.
“By 2027, we plan to rebalance our mine sequencing due to depleting reserves,” Eddy said. IMM, once producing up to 16 million tons annually, currently holds an estimated 45 million metric tons of coal reserves across a 24,121-hectare concession area.
IUPK application underway
In parallel with the production target revision, IMM is preparing to transition its mining permit from the Coal Contract of Work (PKP2B) scheme to a Special Mining Business Permit (IUPK) as its current license is set to expire in 2028.
"If the IUPK is approved, IMM could extend operations for another 10 years,” Eddy explained, adding that the company is currently finalizing the application process with the Ministry of Energy and Mineral Resources (ESDM).
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As part of the IUPK approval requirements, coal producers must demonstrate a commitment to downstream development. IMM previously completed a preliminary study on coal gasification — specifically Underground Coal Gasification (UCG) — at the end of 2022, with pilot trials conducted during 2023–2024 and a feasibility study scheduled for completion in 2025.
The gasification project initially included plans to supply syngas to PT Pupuk Kaltim (PKT) under a memorandum of understanding. However, the initiative has been put on hold due to technology and market concerns.
“The technology is not yet proven commercially — not here, not in Australia, not in Uzbekistan. On top of that, PKT has found a cheaper and more abundant gas supply. This made us rethink our strategy,” Eddy said.
Shift to semi coke
While the gasification project has been shelved for now, IMM is not abandoning its downstream plans. The company is shifting its focus to the development of semi coke — a high-calorific, low-sulfur coal derivative used as industrial fuel.
Eddy emphasized that, under current regulations, a company applying for IUPK is not required to immediately operate a downstream facility. Submission of a downstream development concept and a feasibility study is sufficient to demonstrate compliance.
“Once the IUPK is granted, we’ll execute the project during the first 10-year extension,” he said.
Editing by Reiner Simanjuntak