Indonesia to Exceed 600 Million Ton Coal Production Quota Amid Price Surge

Indonesia's government plans to increase coal production quotas to over 600 million tons as a policy relaxation measure, responding to soaring global coal prices. The Ministry of Energy and Mineral Resources (ESDM) confirmed the adjustment, stating it will align with domestic needs.

Deputy Minister of Energy and Mineral Resources, Yuliot, explained that the ministry has assessed the country's coal requirements, including those of state electricity company PT PLN (Persero). PLN requires 154 million tons of coal, with 134 million tons already contracted. This leaves a deficit of 20 million tons, which the ministry is working to secure.

Minister of ESDM Bahlil Lahadalia linked the relaxation of coal production quotas to the commodity's price surge, partly driven by the conflict involving the US, Israel, and Iran. The benchmark coal price (HBA) for the second period of June 2026 was set at $123.91 per ton, an increase from $116.32 per ton in the second period of May 2026.

Lahadalia noted that ideally, high prices should encourage increased production for positive economic impact. While the exact quota after the relaxation is not yet set, the ministry had initially planned for a 2026 production quota of around 600 million tons, a reduction from the 790 million tons realized in 2025. This earlier cut was based on an anticipated imbalance in international supply and demand. However, recent geopolitical events have drastically altered the market, pushing prices up significantly.