East Kalimantan district prepares for potential coal-sector layoffs

The government of East Kutai Regency in East Kalimantan is preparing contingency measures to mitigate potential layoffs in the coal sector, as uncertainty persists over Indonesia's 2026 coal production policy despite signals that the government may relax earlier output restrictions.

East Kutai Regent Ardiansyah Sulaiman said the district administration was working with mining companies to provide skills training for workers who could be affected if coal production declines and employment contracts are terminated.

"As one of the country's major coal-producing regions, this policy could have significant economic and social impacts, particularly on employment," Ardiansyah was quoted as saying by state news agency Antara on Saturday.

The comments come after the Ministry of Energy and Mineral Resources earlier approved a 2026 coal production quota of around 600 million metric tons, well below Indonesia's 817.5 million tons of output in 2025. The government has since indicated it may raise the quota in response to improving coal prices and geopolitical uncertainties.

Energy Minister Bahlil Lahadalia said this month the government would undertake a "measured relaxation" of production limits if market conditions remain favorable, while the ministry is scheduled to begin reviewing miners' annual work plans and budgets (RKAB) in July.

Despite the possible relaxation, industry groups have warned that production cuts implemented earlier this year have already reduced mining activity and could lead to job losses across the coal supply chain, including contractors, transport operators and equipment providers.

The Indonesian Mining Professionals Association (Perhapi) estimated in February that as many as 50,000 workers in mining services could be affected by lower production levels, while around 10,000 heavy equipment units risk becoming idle.

To prepare for such risks, East Kutai plans to expand vocational training programs in sectors including agriculture, plantations, fisheries and small business development.

Ardiansyah cited a recent initiative by mining contractor PT Pamapersada Nusantara (PAMA), which conducted skills training programs for employees in Bengalon district.

"Capacity-building programs like this can provide a concrete solution," he said, adding that workers would need alternative skills to improve their chances of finding employment outside the mining sector.

The district government also plans to meet officials from the Energy Ministry next week to discuss the potential impact of any production cuts on coal-producing regions.

According to Ardiansyah, the meeting was originally scheduled for June 18 but was postponed at the request of a delegation led by Deputy Regent Mahyunadi.

The district intends to raise concerns that lower coal production could slow economic activity, increase unemployment and poverty, and create broader social challenges in mining-dependent communities.

East Kalimantan is Indonesia's largest coal-producing province, accounting for about 55% of national output, or more than 436 million metric tons annually. The province dominates coal production across Kalimantan, which supplies more than 80% of Indonesia's total coal output. East Kutai is among the province's most mining-dependent districts.

Editing by Reiner Simanjuntak