Indonesia temporarily suspends operations of 90 coal mines over environmental non-compliance

Indonesia's Ministry of Energy and Mineral Resources (ESDM) has imposed temporary operational suspensions of up to 60 days on 190 mining companies, including 90 coal producers, for failing to meet environmental obligations, according to an official sanction letter seen by Platts Sept. 22.

The coal mines are mostly located in Jambi, South Kalimantan, Central and East Kalimantan, Sulawesi and South Sumatra, provinces of Indonesia, the document showed.

The directive, signed by Director General of Minerals and Coal Tri Winarno on behalf of ESDM, follows repeated non-compliance by the companies despite three prior administrative warnings issued on Dec. 10, 2024, May 16, 2025, and Aug. 5, 2025. The violations relate to the failure to provide mandatory reclamation and post-mining guarantees.

The suspension comes at a time when persistent rainfall in Kalimantan and Sumatra has already disrupted mining and loading activity, tightening the availability of September and early October cargoes. Yet, most market participants expect a limited impact on supply.

"There are no major mines whose operations have been suspended. We don't see any significant impact on supply from this directive," an Indonesia-based producer said.

"Many of the mines facing the temporary production halts are small-scale operations that only produce when market prices are favorable, primarily due to the administrative challenges they encounter," added another Indonesia-based producer, who also found the halt had limited impact on the supply situation.

The sanctions are grounded in Government Regulation No. 78/2010 and Ministerial Regulation No. 26/2018, which require mining permit holders to secure reclamation guarantees before operations commence.

ESDM emphasized that despite the suspension, mining license holders remain obligated to continue site management, maintenance, and environmental monitoring within their concession areas. The order also notes that the suspension will be lifted immediately if the companies submit reclamation plans and place reclamation guarantees through 2025.

Meanwhile, short covering demand from China has supported inquiries into Indonesian cargoes, with traders citing dwindling port inventories and expectations of firmer domestic coal prices in the weeks ahead.

ESDM did not respond to a request for comment from Platts.