Government Approves Nearly 400 Million Tonnes of Coal for 2026 Work and Budget Plan
The Ministry of Energy and Mineral Resources (ESDM) has issued production permits for coal under the 2026 Work and Budget Plan (RKAB) totalling approximately 400 million tonnes, according to Tri Winarno, Director General of Mineral and Coal (Dirjen Minerba) at the ESDM Ministry. The government is working intensively to complete all RKAB applications submitted by industry operators, with a target coal production of approximately 600 million tonnes for 2026.
Tri noted that the approval process for nickel RKAB is also progressing, with the government having already approved over 100 million tonnes of nickel production applications. He attributed delays in the RKAB approval process to challenges with the transition to a new digital application system, which requires adaptation time to ensure that data submitted by companies aligns with the ministry’s verification systems.
The government has decided to reduce coal and nickel production targets for 2026 to maintain balance between supply and demand in global markets, thereby supporting commodity prices. Coal production has been cut to approximately 600 million tonnes—a reduction of around 190 million tonnes compared to 2025’s realisation of 790 million tonnes. Energy and Mineral Resources Minister Bahlil Lahadalia explained that this reduction aims to boost coal prices and preserve coal reserves for future generations. Indonesia currently supplies approximately 514 million tonnes of coal, representing 43 per cent of global trading volume of 1.3 billion tonnes annually, which has contributed to falling coal prices.
Nickel production has also been adjusted to approximately 250-260 million tonnes to align with the capacity of domestic smelters, down from 379 million tonnes under the 2025 RKAB. The adjustment reflects the government’s strategy to support higher nickel prices, which briefly reached US$18,000 per tonne following the announcement of the production cut. The RKAB evaluation process continues with the new digital application system, though all processes are running smoothly, with current RKAB permits remaining valid until March.