Indonesia Slows Coal Output to 60.5M Tons Monthly as Supply Caps Bite

JAKARTA, Investortrust.id — Indonesia produced 423.71 million metric tons (467.06 million short tons) of coal from January through July 2026, delivering roughly 270 million metric tons (297.62 million short tons) to international buyers. The output demonstrates an unmistakable deceleration of nearly 8 million metric tons (8.82 million short tons) per month compared to 2025 as the government aggressively curtails supply through mandatory work and budget plans (RKAB).

The supply slowdown highlights a calculated policy shift across the world’s top thermal coal exporter. Officials are actively moving away from maximizing sheer volume to balance domestic energy mandates against weakening long-term export demand.

Indonesia dominates seaborne thermal coal markets, supplying massive power grids across China and India. By deliberately tightening extraction quotas, Jakarta is attempting to cushion coal asset valuations against an influx of renewable energy while husbanding remaining reserves for domestic industry.

Taming the Supply Spigot

National coal production hit a record 817 million metric tons (900.59 million short tons) in 2025, averaging roughly 68 million metric tons (74.96 million short tons) each month. Tri Winarno, Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources (ESDM), highlighted that the sector faces entirely new strategic hurdles.

"On the coal side, the challenges are different but no less strategic; Indonesia's coal production in 2025 reached 817 million metric tons," Winarno said during a mining industry seminar hosted by the Association of Indonesian Mining Professionals (Perhapi) in Jakarta on Thursday, Sept. 10, 2026.

Production through July 2026 averaged 60.5 million metric tons (66.69 million short tons) per month over the seven-month span. That pace sits 7.5 million metric tons (8.27 million short tons) below the 2025 monthly run rate, bringing the pullback close to 8 million metric tons per month.

A Pivot Toward Optimum Production

The government plans to manage coal extraction strategically rather than pumping maximum volumes into softening markets. In 2025, total exports consumed 522 million metric tons (575.41 million short tons), while the Domestic Market Obligation (DMO) absorbed 246 million metric tons (271.17 million short tons).

"Our approach is optimum production," Winarno noted. "Production must be balanced against market conditions, demand requirements, DMO mandates, pricing trends, logistics, and reserve sustainability."

Global headwinds are mounting as renewable energy displaces fossil fuels across major import terminals. While India and Southeast Asian economies still offer near-term pockets of demand, Indian miners are rapidly expanding domestic extraction in southern and eastern coalfields, shrinking long-term import windows.

Critical Minerals Face Different Fortunes

Unlike thermal coal, base and battery metals are tracking divergent market fundamentals shaped by technology and industrial supply snarls. Indonesia provides 60% to 65% of the world’s refined nickel, giving domestic policy immediate sway over global pricing.

After trading near $15,000 per metric ton ($6.80 per pound) in 2025, global nickel prices pushed toward $19,000 per metric ton ($8.62 per pound) before settling into a corridor between $16,800 and $16,900 per metric ton ($7.62 to $7.67 per pound).

Copper markets experienced sharper swings despite Indonesia accounting for only 5% of global output. Production bottlenecks at mining giant PT Freeport Indonesia tightened global supplies, sending international copper prices rallying near $15,000 per metric ton ($6.80 per pound).