Minister Bahlil to Relax Indonesian Coal Output, Eyes Higher Production

Jakarta, CNBC Indonesia - Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia has affirmed that coal production will be relaxed from the target set for 2026, following a surge in coal prices as the government seeks to capitalise on the moment to sell more coal. While not explicitly stating this year’s production target, Bahlil indicated that relaxing domestic coal output could provide benefits for the state, businesses, and the public. “We will continue to observe the level of global demand and prices. For domestic needs, we will certainly fulfil everything,” Bahlil responded when asked about the national coal production target for 2026 at the DPR RI Building on Wednesday (10/6/2026). The government had initially planned to cut coal production this year to maintain selling prices, which had tended to decline at the end of 2025. Previously, the government targeted coal production at 600 million tonnes per year. “For global prices, we will see; if the price is good, we will carry out a measured relaxation. The goal is that we also want to obtain a good price and our foreign exchange can come in,” he added. The government continues to monitor the development of the global geopolitical situation on world coal prices. “We will see how it develops,” he stated. Executive Director of API-IMA, Sari Esayanti, stressed that this measured relaxation policy is crucial to ensuring the mining sector remains resilient and able to contribute maximally to the national economy amid global uncertainty. “This production relaxation policy is becoming increasingly relevant for business actors amid the current trend of strengthening US dollar exchange rates. On one hand, the rise of the dollar is indeed profitable because coal export transactions use the US dollar, so income converted to Rupiah will increase. However, on the other hand, business actors are also facing the burden of swelling operational costs. We know that the main components of mining operations, such as fuel, heavy equipment, and spare parts, are highly dependent on imports, whose prices are pushed up by the strong dollar,” Sari explained. According to Sari, this relaxation provides space for companies to compensate for high operational costs. “Looking at the real situation on the ground, high operational cost pressures and reductions in production quotas have forced some mines to halt their production. This relaxation policy from the Ministry of ESDM is a breath of fresh air that can guarantee the sustainability of mining operations and is very important to prevent potential layoffs,” she added. Aside from saving the continuity of the industry and the workforce, IMA believes that the momentum of high commodity prices combined with the strengthening of the US dollar and this relaxation policy will have a very significant impact on state revenue projections.