Divya Karyza, Jakarta – The Energy and Mineral Resources Ministry has approved annual production plans (RKAB) for 580 million tonnes of coal, the ministry's coal and mineral director general, Tri Winarno, said on Friday.
He added that the remaining approvals were expected to be finalized shortly, signaling that this year's total production quota would exceed that figure.
The accelerated approvals come as the government signals a strategic shift to increase coal output this year, potentially allowing the country to capitalize on rising coal prices amid the Iran war.
Previously, the government revealed plans to cut national production targets from 790 million tonnes last year to around 600 million tonnes this year in an effort to address an oversupply that had weakened coal prices.
On Dec. 31 last year, the ministry issued a circular allowing mining companies to conduct extraction activities of up to 25 percent of the production outlined in their three-year RKAB. This means coal miners can continue extraction under the rule until March 31, even if formal approval for this year's RKAB has yet to be finalized.
However, Indonesia's stance appears to have shifted as coal prices rose after United States-Israeli attacks on Iran prompted Tehran to threaten to block the Strait of Hormuz, a key passageway for global oil shipments.
With oil prices remaining elevated at around US$100 per barrel due to supply concerns amid the Iran war, many countries have turned to alternative energy sources, including coal. The increased demand has driven up prices, with Newcastle coal futures rising to $135 per tonne, about 16 percent higher than before the war.
Coordinating Economy Minister Airlangga Hartarto said President Prabowo Subianto had ordered the administration to increase coal production volumes as part of the government's effort to boost state revenue amid rising coal prices.
"The President instructed the government to raise coal output, meaning there will be improvements related to the RKAB," Airlangga said on March 19.
He added that the government is also considering implementing a coal export tax to safeguard the state budget from energy price volatility.
"We expect government revenue will also increase from windfall profits," he said.
On March 20, Coordinating Economy Minister spokesperson Haryo Limanseto said the final decision on production quota increases and RKAB revisions would be made after the Idul Fitri holidays.
At the time, he added, discussions were ongoing at the technical level between ministries.
Regarding the nickel production quota, Energy Ministry's Tri on March 3 acknowledged that mining companies are permitted to revise their production quota proposals this year, though adjustments may vary on a case-by-case basis.
Tri emphasized that such revisions, which could potentially boost nickel output by up to 30 percent this year according to the Indonesian Nickel Miners Association (APNI), are a standard regulatory provision and not a specific response to the government's earlier decision to cap nickel ore production at 260 to 270 million tonnes this year.
He noted that any quota revisions are currently slated for the second half of 2026.