Govt will relax on coal production quota

Jakarta (ANTARA) - Indonesian Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said the government will implement a relaxation of coal production quotas following the rise in coal price due to the conflict between the U.S. and Israel against Iran.

"We will implement a measured relaxation. This means that if the coal prices are good, we will increase the production," Lahadalia said at a press conference at the Senayan Parliament Building, Jakarta, on Monday.

He said the measured relaxation of the coal production quota was a government measure to keep pace with the coal price trends. The reference coal price (HBA) for the first period of June 2026 was set at US$121.83 per ton.

This figure is higher compared to the HBA in the second period of May 2026, which was US$116.32 per ton. Ideally, he added, when prices are good, then the production should also be high to achieve a positive impact.

"With good prices, we also need to increase production. So that the businesses will profit, the government will profit, and the people will also benefit," Lahadalia said.

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However, he noted the ministry had not yet calculated the production quota that the government will set, following this policy to ease production restrictions.

"We'll see how things develop," he said

In early 2026, the ministry set a production quota of around 600 million tons of coal in 2026, or a reduction of 190 million tons, compared to the realisation of 790 million tons in 2025. The cuts are based on the imbalance between supply and demand in the international market throughout 2025.

The imbalance caused the coal prices reach to US$97.65 per ton in the second quarter of July 2025.

However, the outbreak of the US-Israel war against Iran caused the coal prices to skyrocket, from less than US$120 per tonne to over US$130 per tonne in a week in early March 2026.

The current increase of coal prices is triggered by disruptions in the distribution of crude oil and liquefied natural gas (LNG) in the international market.

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Translator: Katriana

Editor: Fransiska Ninditya

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