- Govt yet to specify extent of planned increase in quotas
- Strong energy prices prompting policy shift to boost revenues
Mysteel Global: Indonesia has again revised its coal production policy for 2026, signaling a potential increase in output though without disclosing specific volumes, a move that adds fresh uncertainty to supply expectations from the world’s largest thermal coal exporter.
Coordinating Economic Minister Airlangga Hartarto said on March 19 that President Prabowo Subianto had instructed authorities to raise national coal output by adjusting miners’ production quotas under the 2026 Work Plan and Budget (RKAB).
The latest move marks a clear shift in policy direction. In early January, the government had indicated plans to cap coal output at around 600 million tonnes for 2026, down sharply from the 790 million tonnes produced in 2025, in an effort to tighten supply and support prices, as Mysteel Global reported. That earlier stance had buoyed market sentiment, prompting some miners to scale back spot sales and push up offer prices.
The government has yet to specify the extent of the planned increase in quotas, although according to local consultancy Petromindo, miners are allowed to revise their annual RKAB submissions to the Ministry of Energy and Mineral Resources by mid-year, suggesting that output adjustments could be implemented gradually.
The policy reversal comes against the backdrop of a surge in global energy prices, driven by escalating tensions in the Middle East. Disruptions to oil and gas flows, particularly concerns over navigation through the Strait of Hormuz, have led to fuel switching in several countries, providing additional support to coal demand.
Reflecting this trend, Newcastle coal futures for April delivery on ICE closed at $146.5/t on March 20, the highest level since October 17, 2024.
Market participants said fiscal considerations are likely a key driver behind the shift. “The government is looking to boost revenue while offsetting increased budgetary pressure from higher oil and gas prices,” an Indonesian miner said.
In parallel, Jakarta is also reviewing the potential introduction of a coal export tax in response to rising prices. Airlangga noted that such a policy remains under evaluation.
According to an earlier report by Mysteel Global, Indonesia had planned to introduce coal export tariffs from the start of 2026, with indicative rates set at 1-5% of coal prices. The policy has yet to be formally implemented due to opposition from miners, although authorities have indicated that any tariff could be applied retroactively.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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