Energy ministry orders miners to boost coal supplies amid Java blackouts

The Ministry of Energy and Mineral Resources has ordered coal miners to increase domestic coal deliveries to power plants after recent rolling blackouts in parts of Java highlighted concerns over fuel availability for electricity generation.

According to a ministry letter dated June 12 seen by Bloomberg News, coal producers were instructed to supply an additional 2.7 million metric tons of coal to power plants this month. The letter cited a ministerial decree that allows the government to require miners to prioritize domestic sales when local demand is not adequately met.

The additional volume is equivalent to about 2% of the coal contracted so far this year by state utility PT PLN (Persero), Bloomberg reported.

The directive came shortly before power disruptions affected several areas across Java, Indonesia's most populous island, prompting the implementation of limited rolling blackouts.

Energy Minister Bahlil Lahadalia said this week that the outages were caused by a combination of power plant disruptions, shortages of medium-calorific-value coal and maintenance issues within the electricity system.

"PLN's concern was the availability of medium-calorific coal for blending," Bahlil told reporters on Monday after a meeting with President Prabowo Subianto.

Bahlil said Indonesia's power sector requires around 154 million metric tons of coal this year, while supply contracts totaling 134 million tons have been secured. The government has instructed coal producers to allocate between 180 million and 190 million tons of coal to PLN and independent power producers (IPPs).

He said the ministry had stepped in to help PLN secure additional medium-grade coal supplies needed by power generators.

PLN President Director Darmawan Prasodjo said one of two large power plants that experienced disruptions had resumed operations on Sunday evening, helping restore stability to the Java grid.

"One major power plant was restored last night, synchronized with the Java electricity system and has begun supplying power," Darmawan said.

PLN said rolling blackouts had been significantly reduced following the restoration of the generating unit and the arrival of additional coal supplies.

The government later identified the affected facilities as units 1 and 4 of the Cilacap coal-fired power plant complex in Central Java.

The coal supply issue has also intensified debate over Indonesia's domestic market obligation (DMO) policy, which requires miners to sell a portion of their output to local consumers, including PLN, often at prices below international market levels.

Industry groups have urged the government to review the DMO coal price cap, which has remained fixed at $70 per tonne since 2018 for coal supplied to PLN.

Bahlil said securing supplies of medium-calorific coal has become increasingly challenging as such coal becomes scarcer and production costs rise. The Indonesian Coal Mining Association (APBI) has argued that the current pricing mechanism no longer reflects higher costs for fuel, equipment, labour and environmental compliance.

Indonesia is the world's largest exporter of thermal coal and has tightened mining production quotas this year as part of efforts to support coal prices.

Energy ministry officials, however, signalled last week that the ministry was considering revising mining companies' 2026 work plans and budgets (RKAB) to allow higher coal production in response to stronger coal prices amid heightened geopolitical tensions.

The government has set a national coal production target of 600 million metric tons for 2026, down about 24% from record output of 790 million tons in 2025.

Editing by Reiner Simanjuntak