Coal output curbs may trigger layoffs in East Kalimantan, official says
Friday, May 8 2026 - 08:07 AM WIB
Hundreds of workers in Indonesia’s coal mining sector could face layoffs following the government’s decision to cut national coal production targets for 2026, an East Kalimantan labor official said.
Arismunandar, head of industrial relations and workers’ social security at East Kalimantan’s Manpower and Transmigration Office, said several mining companies had notified the regional government of workforce reduction plans.
“Several companies have already notified us, including companies from Bayan Group and PT BAS,” Arismunandar said, according to local news portal Kaltimkita.com.
He said layoffs at PT BAS had been underway since April 22 and involved around 152 workers.
Other coal mining companies operating in the regencies of West Kutai, East Kutai and Kutai Kartanegara had also submitted similar plans, he added.
“Based on several reports received, the potential number of affected workers has reached hundreds,” Arismunandar said.
Indonesia plans to limit coal production in 2026 to around 600 million metric tons, down from last year’s realized output of about 790 million tons, as authorities tighten approvals for miners’ work plans and budgets, known locally as RKAB.
Read also: Indonesia to continue coal use to maintain energy security and stable power costs
The policy is being implemented under Energy and Mineral Resources Ministerial Regulation No. 17 of 2025, which requires phased approvals of production quotas.
“Companies must adjust their production capacities,” Arismunandar said, adding that firms were also expected to comply with labor regulations.
He said the regional government, together with employers and labor representatives, was seeking to avoid layoffs where possible.
“However, if they are unavoidable, for example due to efficiency measures to prevent losses or because the company is suffering losses, then they are permissible under the regulations,” he said. “What is important is that workers’ rights must be fulfilled.”
Arismunandar said affected workers would be encouraged to participate in the government’s Job Loss Guarantee program, which provides compensation equivalent to around 60% of wages for up to six months, along with job placement and retraining support.
Editing by Reiner Simanjuntak