Government Approves Nearly 400 Million Tonnes of Coal for 2026 RKAB

The Ministry of Energy and Mineral Resources (ESDM) has approved coal production permits under the 2026 Work and Budget Plan (RKAB) totalling nearly 400 million tonnes.

Director General of Mineral and Coal (Dirjen Minerba) at the Ministry of ESDM, Tri Winarno, confirmed that the government is working intensively to finalise all RKAB applications submitted by industry players. The coal production target for the 2026 RKAB is approximately 600 million tonnes.

“(The approval of coal RKAB) is around 390 (million tonnes) heading towards 400 (million tonnes),” Tri stated when met at the Ministry of ESDM office in Jakarta, quoted on Wednesday (25/3/2026).

Tri explained that the RKAB approval process is also progressing for nickel. He noted that to date, the government has given the green light to over 100 million tonnes of nickel production RKAB applications for this year.

“Nikel is probably around a hundred (million tonnes) or something,” he added.

Regarding complaints about the lengthy RKAB issuance process, he mentioned challenges in using the new application system. The transition to this new digital application requires adaptation time to ensure that data entered by industry players aligns with the ministry’s verification system.

“The new application sometimes can’t yet align. Both the companies and the government are active. If it’s not active, it won’t work,” he emphasised.

Production Cut Plan

The Ministry of ESDM had previously decided to reduce coal and nickel production targets for 2026 in the Work and Budget Plan (RKAB). This was done to maintain balance between supply and demand for these commodities in the global market, ultimately to boost commodity prices this year.

However, based on the latest developments from a limited meeting of President Prabowo Subianto with several ministers, the government has decided to increase coal production in the 2026 RKAB.

This was conveyed by Coordinating Minister for the Economy, Airlangga Hartarto, after attending the limited meeting held by President Prabowo with several ministers on Thursday (19/3/2026) last week.

“We are maintaining the state budget so that the deficit remains below 3% and in line with the directives from the Full Cabinet Session, and it has been discussed with technical ministries, through efficiencies from various ministries and agencies. With these efficiencies, the 3% deficit can be maintained,” Airlangga stated on Thursday (19/3/2026).

Coal

For the coal sector, the government plans to cut production in 2026 to around 600 million tonnes. This figure represents a decrease of about 190 million tonnes compared to the 2025 realisation of 790 million tonnes.

Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said the production target cut aims to encourage coal prices to rise again and preserve coal reserves for the future.

According to him, Indonesia supplies around 514 million tonnes of coal or 43% of the total global trade volume of 1.3 billion tonnes per year. This situation is the root cause of the falling coal prices.

“As a result, supply and demand are not balanced, meaning coal prices drop. Through this happy opportunity, the Ministry of ESDM has met with Dirjen Minerba, and we will revise the RKAB quota. So, we will reduce our production so that prices are good and our mines are for our grandchildren,” Bahlil said, quoted on Monday (19/1/2026).

Nickel

In addition to coal, the government will also adjust nickel production to align with domestic downstream industry needs.

At least, the Ministry of ESDM will cut the nickel production target to around 250-260 million tonnes. This is lower than the 2025 RKAB of 379 million tonnes.

Director General of Mineral and Coal (Minerba) at the Ministry of ESDM, Tri Winarno, said the adjustment is based on domestic smelter capacity needs.

“We will adjust nickel to the production capacity of smelters. Possibly around 250-260 million tonnes,” said Tri Winarno when met at the Ministry of ESDM on Wednesday (14/1/2026).

Tri acknowledged that the nickel production cut policy is one strategy to encourage nickel price increases. It has proven effective, as after the plan was announced, nickel prices on the global market briefly reached US$18,000 per tonne.

He revealed that the RKAB evaluation process is still ongoing, along with the use of the new application. However, overall, the process is running smoothly, especially since existing RKABs can still be used until March.

“But don’t think this is causing disruptions to RKAB approvals; that’s not right. Everything is fine. We can still use them until March,” he said.