MEMR signals coal production quota above 600m tonnes, opens room for revisions

By Calvin Purba

The Ministry of Energy and Mineral Resources (MEMR) has signalled that the country’s coal production quota in 2026 could exceed 600 million tonnes, as domestic demand from state power utility PLN and local industries remains strong.

Vice Minister of Energy and Mineral Resources Yuliot Tanjung said the estimate was based on calculations by the ministry’s Directorate General of Minerals and Coal, as well as projected demand from the domestic market.

“So based on calculations by the Director General of Minerals and Coal, as well as demand from PLN and domestic industries, the estimate is more than 600 million tonnes per year,” Yuliot said on Friday (Feb. 6).

To accommodate domestic demand, the government will allow coal producers to revise their annual work plans and budgets (RKAB) where necessary.

“In implementation, the RKAB can be revised as long as there are changes or increases in domestic demand. We will carry out evaluations,” Yuliot said.

Read also: Coal DMO likely to exceed 30%, MEMR says

The remarks come amid industry concerns over proposed output cuts for 2026. Earlier, Energy and Mineral Resources Minister Bahlil Lahadalia said the government planned to lower the national coal production target to around 600 million tonnes in 2026, down from an estimated 790 million tonnes in 2025, as part of efforts to rebalance global supply and support coal prices.

Bahlil said Indonesia’s dominant role in the global coal market—supplying about 514 million tonnes, or roughly 43%, of the 1.3 billion tonnes traded globally—has contributed to oversupply and downward pressure on prices.

“Coal production in 2025 is around 790 million tonnes, with 65.1% exported and about 32% allocated for domestic use under the DMO. All targets were achieved. But because Indonesia supplies such a large share of global trade, we need to rebalance production,” Bahlil said on Jan. 8.

However, coal producers have warned that deep cuts could threaten business viability. Earlier this month, the Indonesian Coal Mining Association (APBI-ICMA) said some miners were facing production reductions of between 40% and 70% under preliminary 2026 ceilings set during RKAB evaluations.

APBI-ICMA said such reductions could push operations below economically viable levels, raising the risk of shutdowns, layoffs, and knock-on effects across coal transport, shipping and supporting industries. The group urged the government to reassess production ceilings by balancing supply management with economic sustainability, employment impacts and regional stability.

Yuliot’s comments suggest the government may take a more flexible approach, adjusting production levels where necessary to meet domestic demand while continuing efforts to manage overall output.

Editing by Reiner Simanjuntak