Indonesia’s coal industry faces another challenging year in 2026, with production expected to remain under pressure as structural and regulatory constraints continue to shape the supply outlook.
The forecast follows a difficult 2025, when coal output declined by an estimated 9 per cent to around 761 million tonnes, as a mix of weak prices, swollen inventories, and operational bottlenecks weighed on leading producers.
In 2025, several large-scale miners struggled to maintain momentum.
PT Arutmin Indonesia (AGM) saw volumes fall as efficiency improvements and logistical optimisation temporarily reduced mining activity, while PT Firman Ketaun Perkasa (FKP) remained offline due to restrictions tied to its RKAB production quota.
Collectively, these setbacks overshadowed incremental gains from selective ramp-up projects, leading to an overall contraction in national output.
The outlook for 2026 points to continued restraint, with limited recovery potential across mature operations nearing the end of their mine life.
Analysts expect Indonesia’s coal producers to remain cautious, constrained by tighter environmental rules, quota limitations, and uneven support from the domestic power sector.
Although stronger RKAB allocations and steadier demand from state-owned utilities may provide marginal relief, they are unlikely to reverse the broader downward trajectory.
Moreover, persistently soft export demand continues to challenge Indonesia’s export-oriented producers.
Price-sensitive buyers in key Asian markets — including China, India, and South Korea — are maintaining conservative import strategies, prompting miners to prioritise profitability over volume growth.
This shift is particularly evident among established players such as AGM, PT Sungai Danau Jaya, and PT Tanah Bumbu Resources, who are expected to sustain disciplined production plans centred on margin preservation.
