Indonesia Relaxes Mining Quotas With ‘Measured’ Supply Controls to Guard Global Commodity Prices

JAKARTA, Investortrust.id — Indonesia is opening the door to higher mining output this year, granting mid-year quota relaxations to coal and mineral producers while maintaining strict controls to prevent market gluts from crashing global prices.

Speaking at the Ministry of Energy and Mineral Resources (ESDM) headquarters in Jakarta on Monday, Aug. 3, 2026, Energy Minister Bahlil Lahadalia confirmed that the government is revising Work Plans and Cost Budgets (RKAB) to accommodate higher production demands.

As the world's leading exporter of seaborne thermal coal—commanding roughly 43% of global trade—and a dominant supplier of battery-grade nickel, Indonesia's decision to relax output caps directly impacts global energy markets. By opening quota expansions through a "selective and measured" approach, Jakarta is balancing domestic power demand and corporate volume requests without flooding international markets or undercutting its own pricing power.

Selective Quota Relaxations Target Market Balance

The government's mid-year RKAB evaluation responds to widespread industry calls for additional production allocations. However, Minister Bahlil emphasized that while quota increases are underway, volume adjustments will be calibrated strictly against supply and demand dynamics.

"We evaluate RKAB revisions with extreme caution by balancing demand and supply," Bahlil stated on Monday in Jakarta. "Ideally, we want to mine large volumes, but prices must also remain favorable."

Bahlil warned that uncontrolled production relaxations risk destroying commodity valuations. He pointed to recent market rumors of unrestricted nickel quota relaxations, which immediately drove global nickel benchmark prices down from $18,000 to $17,000 per metric ton.

"Global seaborne coal trade totals roughly 1.3 billion metric tons annually," Bahlil explained. "If world trade is only 1.3 billion tons and national production is forced up to 1.5 billion tons, prices will inevitably drop. I do not want Indonesian commodities priced cheaply because of our own policy decisions."

While confirming that volume targets will increase under the revised RKABs, Bahlil declined to reveal the exact tonnage increase to prevent speculative market swings.

High-Royalty Miners Prioritized in Revision Rollout

In allocating additional quota capacity, ESDM is prioritizing miners that contribute higher royalty percentages to state coffers. Top-tier operators pay royalties reaching up to 19%, compared to baseline rates of 11%.

"If people ask why some large companies didn't face production cuts or received priority, the answer is simple: they pay royalties up to 19%," Bahlil said on Monday. "I must prioritize operators paying larger royalties."

Bahlil underscored that the relaxation strategy aims to maximize Non-Tax State Revenue (PNBP) under Article 33 of the Indonesian Constitution, which mandates state control over natural resources for public benefit.

"Which scenario is better: producing 1 billion tons to generate Rp 120 trillion ($7.55 billion) in revenue, or producing 800 million tons to generate Rp 130 trillion ($8.18 billion)?" Bahlil asked. "That is the strategy we are executing now."

To avoid market monopolies, ESDM is redistributing production quotas to new entrants while adjusting national targets. National coal output under the 2026 RKAB was initially targeted near 600 million metric tons—down from last year's realization of over 800 million tons—before the current mid-year revision opened up extra capacity.

Concurrently, the government raised the Domestic Market Obligation (DMO) requirement from 25% to 30% to secure power grid supplies for state utility PT Perusahaan Listrik Negara (PLN). Operators failing to fulfill domestic commitments face immediate export blockades on the government's MOMS digital platform.

Clearance of Stranded Export Cargoes

In parallel with the RKAB revisions, Indonesian authorities resolved shipping bottlenecks that temporarily stranded over 100 export vessels carrying Nickel Pig Iron (NPI), Mixed Hydroxide Precipitate (MHP), copper, and alumina.

The shipping delays arose from rigorous customs inspections checking for 17 rare earth elements (REE) and naturally occurring radioactive materials (NORM) contained as trace elements in mineral cargoes. Following inter-ministerial coordination, officials clarified that export restrictions apply strictly to primary commercial minerals.

Surveyor firm PT Sucofindo issued 85 delayed surveyor reports (LS), enabling customs authorities to release stranded vessels. Government agencies are accelerating revisions to key trade regulations within a week to ensure trace elements do not disrupt standard mineral supply chains.