Government to Relax Coal Production Quota as Global Prices Surge
The Deputy Minister of Energy and Mineral Resources, Yuliot Tanjung, has confirmed that the government will provide coal production quotas exceeding 600 million tonnes as a form of relaxation policy amidst surging coal prices.
“Yes, certainly (above 600 million tonnes). Adjusting to domestic needs,” said Yuliot at the Ministry of Energy and Mineral Resources in Jakarta on Wednesday, 17 June 2026.
He stated that the Ministry has evaluated domestic coal requirements, including the needs of PLN’s steam-fired power plants (PLTU). Out of the 154 million tonnes of coal required by PLN, the Ministry noted that 134 million tonnes have already been contracted. Consequently, PLN still requires an additional 20 million tonnes of coal to meet its power generation needs.
“That 20 million tonne deficit is being addressed,” he added.
Previously, the Minister of Energy and Mineral Resources, Bahlil Lahadalia, stated that the government would implement a relaxation of coal production quotas following the rise in commodity prices caused by the conflict between the United States and Israel with Iran.
He explained that the planned relaxation of coal production quotas would be measured, representing a government step to follow global price developments. The Coal Reference Price (HBA) for the second period of June 2026 was set at US$123.91 per tonne, which is higher than the HBA for the second period of May 2026, which stood at US$116.32 per tonne.
Bahlil explained that ideally, when coal prices are favourable, production should be increased to maximise positive impacts. However, Bahlil has not yet specified the exact production quota following the implementation of this relaxation policy.
It is noted that at the beginning of 2026, the Ministry of Energy and Mineral Resources set the 2026 coal production quota at approximately 600 million tonnes, a reduction of 190 million tonnes compared to the 2025 realisation of 790 million tonnes. This reduction was based on the imbalance between supply and demand in the international market throughout 2025.
This imbalance caused coal prices to touch US$97.65 per tonne during the second period of July 2025. However, the outbreak of conflict between the US-Israel and Iran caused coal prices to rocket from below US$120 per tonne to above US$130 per tonne within approximately one week in early March 2026.