The Indonesian Coal Mining Association strongly opposes the coal production target set by the Ministry of Energy and Mineral Resources in its 2026 Work Plan and Budget Assessment, arguing that the target will severely affect the operational continuity of coal companies. The association points out that the officially set production volume is far lower than the approved three-year plan value, the declared 2026 annual plan value that has completed three rounds of assessment, and the actual 2025 production volume, with a reduction of 40% to 70%, and lacks clear setting standards and industry communication.
The association's executive director stated that the drastic production cut will push output below economic scale, affecting business viability and operational continuity. Companies will find it difficult to cover fixed operating costs, environmental protection and safety production obligations, and will also be unable to fulfill financial responsibilities to banks and financial institutions, thereby facing the risk of operational delays or even complete shutdown, leading to mass layoffs at coal companies, contractors, and supporting enterprises.
The impact of this production cut will also spread to mining contractors, transportation and shipping, and various supporting service enterprises, hitting the local economies of coal-producing regions and supporting projects, while increasing the risk of default by companies with financial institutions. If the risk spreads, it will further affect the stability of the financial industry and the overall economy of the producing regions.
In addition, companies have already signed supply contracts with domestic and foreign buyers. A significant downward adjustment in production will lead to the inability to fulfill contractual obligations, facing risks of claims, fines, or even force majeure. It is reported that the production cut target set by the Ministry of Energy requires companies to resubmit their 2026 plan declarations, even though previous declarations had completed three rounds of assessment.
The association therefore calls on the government to reconsider this production target, balancing the economic scale of enterprises, operational continuity, employment impact, and the knock-on effects on supporting industries and local economies, so that production regulation work is compatible with the operational continuity of coal companies and social and economic stability.
The Indonesian Coal Mining Association strongly opposes the coal production target set by the Ministry of Energy and Mineral Resources in its 2026 Work Plan and Budget Assessment, arguing that the target will severely affect the operational continuity of coal companies. The association points out that the officially set production volume is far lower than the approved three-year plan value, the declared 2026 annual plan value that has completed three rounds of assessment, and the actual 2025 production volume, with a reduction of 40% to 70%, and lacks clear setting standards and industry communication.
The association's executive director stated that the drastic production cut will push output below economic scale, affecting business viability and operational continuity. Companies will find it difficult to cover fixed operating costs, environmental protection and safety production obligations, and will also be unable to fulfill financial responsibilities to banks and financial institutions, thereby facing the risk of operational delays or even complete shutdown, leading to mass layoffs at coal companies, contractors, and supporting enterprises.
The impact of this production cut will also spread to mining contractors, transportation and shipping, and various supporting service enterprises, hitting the local economies of coal-producing regions and supporting projects, while increasing the risk of default by companies with financial institutions. If the risk spreads, it will further affect the stability of the financial industry and the overall economy of the producing regions.
In addition, companies have already signed supply contracts with domestic and foreign buyers. A significant downward adjustment in production will lead to the inability to fulfill contractual obligations, facing risks of claims, fines, or even force majeure. It is reported that the production cut target set by the Ministry of Energy requires companies to resubmit their 2026 plan declarations, even though previous declarations had completed three rounds of assessment.
The association therefore calls on the government to reconsider this production target, balancing the economic scale of enterprises, operational continuity, employment impact, and the knock-on effects on supporting industries and local economies, so that production regulation work is compatible with the operational continuity of coal companies and social and economic stability.