JAKARTA - Minister of Energy and Mineral Resources (ESDM) Bahlil Lahdalia revealed the reason behind the reduction of the work plan and cost budget (RKAB) of coal commodities in 2026.
Bahlil said that this RKAB reduction aims to control coal prices in the market, which is getting worse over time due to the imbalance between the demand and supply of coal.
"The price of coal is controlled by foreigners because the total world consumption is 8.9 billion tons, which is traded only 1.3 billion tons. Indonesia supplies coal abroad 560 million 43 to 44 percent," said Bahlil in a public lecture in Jakarta, Thursday, February 12.
He added that although it supplies most of the coal, the price of coal cannot be controlled by Indonesia. According to him, Indonesia supplies too much coal so that the price obtained is very cheap. For this reason, he assessed that this RKAB cut was needed so that the supply of coal and market demand would be balanced.
Previously, the Indonesian Mining Association (API-IMA) hoped that the government could review the policy of setting coal and nickel production quotas for 2026.
The coal production quota for 2026 is set at around 600 million tons, or a reduction of around 190 million tons compared to the realization of 2025 which reached 790 million tons.
IMA Executive Director, Sari Esayanti, explained that this significant reduction in quotas will have an impact on the company's long-term planning, including investment decisions, operational management, and sales contract commitments that have been prepared considering global market dynamics.
"Social and economic impacts, such as labor absorption and regional revenue, also need to be a concern," he said in a statement to the media, Thursday, February 12.
He added that the restriction of coal quotas also has the potential to create a supply gap in the export market that can be taken advantage of by other countries, such as China, which is known to have the capacity to increase its domestic production.
"This condition is feared to affect Indonesia's coal production plans in the future," he said.
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