Indonesia exempts big coal miners from 2026 production cuts: sources

Indonesia's ministry of energy and mineral resources has exempted tier-1 coal miners from mandatory cuts in 2026, market sources told Platts, following a government proposal to limit output in a bid to support prices.

The country's largest producer Bumi Resources will be allowed to mine over 75 million mt this year through its subsidiaries, a company source said. This volume represents nearly 100% of the approval it sought.

Adaro Energy, part of AlamTri Resources, and Kideco Jaya Agung, a member of PT Indika Energy Group, also received nearly 100% of the production approval sought, market sources said.

However, company sources said they were yet to receive a formal confirmation from the ministry.

"Hopefully we are on track, but we have not yet received any official notification," a company source at Adaro said.

Together, the top three miners collectively produce around 170 million mt/year.

An official at majority state-owned PT Bukit Asam also said that its RKAB, or annual production quota, had been confirmed without cuts. "As of today, we haven't received approval for our 2026 RKAB; however, we have already obtained consent from the government that there will be no reduction to the production target we initially submitted," the official said.

The development follows an energy ministry proposal to scale back national coal output by nearly 24% in 2026 to 600 million mt, a move aimed at stabilizing prices, supporting state revenue and rebalancing domestic and export supply. Under the proposal, several miners were asked to lower production by as much as 70% from their proposed levels.

The government last year shifted RKAB approvals from a multiyear to an annual framework, giving policymakers greater flexibility to adjust quotas in response to market conditions.

Most Indonesian grades remained rangebound through 2025 amid higher supply and lukewarm demand from major consumers China and India.

Platts-assessed Kalimantan 4,200 kcal/kg GAR averaged at $45.30/mt FOB in 2025, while Kalimantan 5,000 kcal/kg GAR averaged at $61.30/mt FOB.

Despite major miners avoiding immediate cuts, the quota uncertainty has already weighed on export availability, according to market participants. Several miners have held back spot export offers or delayed cargo sales, citing uncertainty over final quotas and the risk of exceeding future caps.

As a result, spot liquidity has thinned, with traders and potential buyers finding fewer Indonesian cargoes being offered for near-term loading.

Some market participants said that none of the 2026 RKABs have been formally approved, and that communications sent so far should not be interpreted as final decisions.

Market participants believe that while China and India would be able to absorb some of the impact from a reduction in Indonesian coal availability by raising domestic coal production, import-dependent countries like the Philippines, Malaysia, Thailand, Vietnam would remain exposed.

Market sources said policy uncertainty could keep prices supported, prompt contract renegotiations, and place financial strain on smaller miners, potentially amplifying the impact on Indonesia's coal exports if production cuts come into effect.