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Indonesia to reshape coal policy in 2026

From January to September 2025, Indonesia’s coal production fell 15% year-on-year to 509 million tonnes, while exports declined 4.7% to about 285 million tonnes. Shipments to China and India dropped by 16% and 12%, respectively.

Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia at a press conference in Jakarta on January 8, 2026 (Photo: ANTARA)
Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia at a press conference in Jakarta on January 8, 2026 (Photo: ANTARA)

Jakarta (VNA) - The Indonesian Ministry of Energy and Mineral Resources plans to reduce coal production to around 600 million tonnes in 2026, nearly 200 million tonnes lower than the 790 million tonnes produced in 2025.

According to Energy and Mineral Resources Minister Bahlil Lahadalia, the ministry will adjust it according to industrial demand. The production cuts are aimed at stabilising global commodity prices. Currently, global coal trade reaches approximately 1.3 billion tonnes per year, with Indonesia contributing around 514 million tonnes.

Meanwhile, demand from key markets such as China and India has slowed as domestic output rises and the energy transition toward renewables accelerates. From January to September 2025, Indonesia’s coal production fell 15% year-on-year to 509 million tonnes, while exports declined 4.7% to about 285 million tonnes. Shipments to China and India dropped by 16% and 12%, respectively.

The International Energy Agency (IEA) forecasts that global coal demand in 2026 will stand at around 8.78 billion tonnes, below the projected supply of 9.1 billion tonnes, prolonging the oversupply situation.

Coal prices have therefore continued to slide since early November 2025. Indonesia’s reference coal price in the first half of January 2026 fell to 103.3 USD per tonne, down from 109.74 USD per tonne at the end of October 2025 and significantly lower than 114.43 USD per tonne a year earlier.

According to Minister Bahlil Lahadalia, about 32% of coal output, equivalent to 254 million tonnes, was consumed domestically in 2025, with the remainder exported.

Indonesia’s Directorate General of Minerals and Coal is reviewing production quotas for individual companies. The government has also indicated that similar supply-control measures could be applied to other minerals, including nickel, to support downstream processing and sustainable development./.

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