East Kutai warns of mass layoffs as coal output cuts threaten four miners

Four coal mining companies operating in East Kutai, East Kalimantan, could suspend production months ahead of schedule under current coal production quotas, putting more than 10,000 jobs at risk, according to the East Kutai Manpower and Transmigration Office as quoted by local media.

Head of the agency Sulisman said the potential layoffs stem from adjustments to companies' Work Plan and Budget (RKAB), which could result in production quotas being exhausted by the end of August.

The companies identified as facing the greatest impact are PT Indexim Coalindo, PT Gunung Bara Alam Makmur (GAM), PT Perkasa Inakakerta and PT Indominco Mandiri.

Sulisman said more than 10,000 workers could be affected if the current production limits remain unchanged. He added that the impact would extend beyond the mining sector, affecting local businesses, hotels, retailers and tourism through weaker household spending.

According to Sulisman, the central government previously said the production adjustments were intended to manage coal reserves and optimize state revenue amid higher coal prices.

He said, however, that companies operating in East Kutai face the prospect of halting production from September through December if their quotas are not revised, while continuing to bear fixed operating costs.

The East Kutai administration has asked companies to treat layoffs as a last resort and instead consider temporary furloughs or reduced working hours while awaiting a decision on their requests to revise production quotas.

Sulisman said all four companies have submitted applications to the relevant ministry seeking revisions to their RKABs and continue to communicate with the government in the hope that production can continue through the end of the year.

Editing by Alexander Ginting