With Relaxed Regulations, How Much Will Coal Production Increase? Here is Bahlil's Response
The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, has emphasised that coal production will be granted relaxation, potentially exceeding the target set in the 2026 Work Plan and Budget (RKAB) of approximately 600 million tonnes. Bahlil stated that this production relaxation is being considered due to global geopolitical conditions, which have impacted commodity price increases, including coal.
However, he stressed that this relaxation will be measured. “Regarding the RKAB, including coal, we are closely monitoring the geopolitical trends and tensions in the Middle East, as well as global fluctuations. Ideally, the government, entrepreneurs, and the people have an interest in good prices and high production so that entrepreneurs profit, the state profits, and the people experience a positive impact. On that basis, we will provide measured relaxation; meaning, if prices are good, we will increase production. If prices begin to drop, we will implement policies to maintain the supply-demand balance,” he explained following a meeting with the Deputy Chairman of the House of Representatives, Sufmi Dasco Ahmad, and the COO of Danantara, Dony Oskaria, in Jakarta on Monday (08/06/2026).
When asked how much of an increase in coal production the Ministry of ESDM would allow, Bahlil replied that the government would monitor global demand and pricing. “For domestic needs, we will certainly meet everything. There are currently no issues in the domestic sector, particularly for PLN, fertiliser, and other industrial sectors. As for global prices, we will see; if the price is good, we will implement measured relaxation. The goal is to secure good prices and ensure foreign exchange enters the country,” he clarified.
Bahlil declined to provide a specific figure for the production relaxation, stating, “We will see how things develop.”
As previously noted, the government had set the 2026 RKAB production target at approximately 600 million tonnes. This represents a 24% decrease compared to the 2025 production realisation, which reached 790 million tonnes. In early January 2026, Bahlil had suggested that the reduction in production targets was intended to drive coal prices back up and preserve national coal reserves for the future.
“Global coal trade stands at 1.3 billion tonnes. From that amount, Indonesia supplies 514 million tonnes, or 43%. Consequently, supply and demand are not balanced, leading to a drop in coal prices. The Ministry of ESDM has met with the Director General of Minerals and Coal to revise the RKAB quota. We will lower production so that prices remain favourable and our mines are preserved for our grandchildren,” Bahlil explained during a press conference in January 2026.
Currently, global coal prices have surged over the past week, approaching the US$150 per tonne level, driven by positive news from China. According to Refinitiv data as of Friday (05/06/2026), the global coal price for two-month delivery contracts was recorded at US$147.5 per tonne, an increase of 0.31% from the previous day. Prices saw a significant jump of 6.87% in a single day on Monday (01/06/2026) following safety meetings in the coal-rich Shanxi province, which heightened supply concerns following fatal mining accidents last month.