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View all search resultsIndonesia approves 580 million tonne coal production plan, signals output boost
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.
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A barge carries coal on Oct 31, 2023, at the dock next to the Suralaya coal-fired power plant, in Cilegon, Banten. (AFP/Ronald Siagian)
T
he 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.
