JAKARTA - The Indonesian Coal Mining Association (APBI-ICMA) expressed its objection to the potential disruption of mining business continuity in line with the publication of coal production figures by the Minister of Energy and Mineral Resources in the evaluation process of the Work Plan and Budget (RKAB) for 2026.
APBI-ICMA Executive Director Gita Mahyarani said, based on member reports, the production figure set is far below the RKAB 3-year approval figure, as well as the 2026 annual RKAB submission which has been in the 3 evaluation stage and the realization of production in 2025, with significant and varied production cuts in the range of 40 to 70 percent.
"In this case, APBI-ICMA considers that it is necessary to have clear criteria for determination and socialization to business actors so that the RKAB evaluation process can be understood," he said, Saturday, January 31.
He added that the amount of the cut could potentially put the company's production scale below the scale of viable economics, thus impacting business viability and operational continuity.
"With the production scale significantly cut, the company faces difficulties in covering fixed operating costs, environmental obligations, occupational safety, and other financial obligations, including to banking institutions, financing institutions," said Gita.
Gita also said that this condition increases the risk of delays to the suspension of some or all operational activities, including the impact on employment, namely massive layoffs that occur in mining companies, contractors and other supporting companies if the RKAB figure is still significantly cut.
"The impact of production cuts is not only felt by mining companies, but also directly affects mining contractors, transportation companies and shipping companies as well as other supporting service companies that depend on the continuity of mining production activities," said Gita.
Meanwhile, at the regional level, this pruning has the potential to affect local economic activity as well as the sustainability of various supporting programs that have been carried out by the company. This condition also increases the risk of default or default loan to banking institutions, and heavy equipment financing/leasing companies.
"If this risk occurs widely, it will affect the stability of the financing sector and economic activity in coal-producing areas as a whole," he continued.
On the other hand, Gita said that mining companies in principle have contractual commitments with buyers, both for the export market and to meet domestic needs, including domestic supply obligations.
With the production figures set much lower than the initial plan, there is a risk of the company's inability to fulfill these contractual obligations, which can lead to claims, penalties, and force majeure conditions.
"It needs to be emphasized that the RKAB approval process to date is still ongoing," he explained.
However, Gita said that the production cut figure set by the Minister of Energy and Mineral Resources at MinerbaOne was a figure that must be used as a reference for companies to reapply for RKAB 2026 from the beginning, even though previously the RKAB 2026 application of the company was at stage 3 for approval by the Minister of Energy and Mineral Resources.
"APBI-ICMA requests that the coal production cut figure for 2026 which has been set by the Minister of Energy and Mineral Resources can be reviewed again by considering the balanced aspects of the scale of business economics, operational sustainability, employment impacts, and the chain effects on supporting sectors and regional economies, so that the goal of production arrangement can run in line with maintaining the sustainability of mining business and social and economic stability," said Gita.
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