Indonesia approves coal production quota for over 600 mnt for 2026

• Production quota raised slightly from 580 mnt in Mar'26
  
  
• Final target for 2026 kept flexible, to depend on domestic demand
  
  

Mysteel Global: Indonesia's Ministry of Energy and Mineral Resources (ESDM) has approved more than 600 million tonnes (mnt) of coal production under the 2026 Work Plan and Budget (RKAB), the Director General of Minerals and Coal, Tri Winarno, has confirmed.

The approved volume marks a modest increase from the 580 mnt approved in a previous batch in late March 2026, reflecting the government's gradual relaxation of production quota constraints. Early this year, the ESDM planned to trim 2026 coal production to around 600 mnt from the 790 mnt produced in 2025, as reported.

Tri noted the final national production target for 2026 remains flexible, contingent on the evolution of domestic demand -- particularly coal procurement for the power station fleet managed by PLN, Indonesia's state-owned electric utility company. PLN holds a monopoly over the country's power generation, transmission, and distribution facilities, Mysteel Global understands.

"It depends on how the DMO requirement shapes up, because what PLN needs is medium-CV coal," Tri told reporters at the ESDM office in Jakarta.

The government has set the Domestic Market Obligation (DMO) mandate for 2026 at 191 mnt, of which PLN's annual coal requirement stands at 152-154 mnt. Of that, PLN has contracted around 134 mnt so far, leaving a gap of roughly 18-20 mnt still to be covered by supply agreements.

The ministry had approved 664 coal mining RKABs as of mid-June, with additional applications still under review pending completion of required documentation. Tri said that the government is conducting comprehensive evaluations of applications, reviewing administrative documents, licensing legality, mining plans, environmental obligations, and the companies' ability to fulfil state revenue obligations.

The government plans to open a window for RKAB revisions starting in July, though officials have not yet determined the additional production volume that may be granted through the relaxation.

In the first four months of 2026, Indonesia's coal production reached 229 mnt, of which around 145 mnt were allocated for export and 84 mnt supplied to meet domestic obligations, Tri said last month.

Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.