Indonesia raises coal production quota only to meet PLN demand

The government has approved an increase in this year's coal production quota solely to meet additional fuel requirements for state utility PT PLN, while maintaining production limits for other domestic and export markets, a senior energy ministry official said on Friday.

The additional allocation, approved under revisions to miners' 2026 Work Plan and Budget (RKAB), is intended exclusively to secure coal supplies for PLN's coal-fired power plants following recent electricity supply disruptions.

"The additional allocation is only for PLN. That's all," Tri Winarno, Director General of Minerals and Coal at the Ministry of Energy and Mineral Resources, told reporters.

Tri did not disclose the size of the additional production quota.

The government had earlier reduced Indonesia's 2026 coal production target to around 600 million tonnes from 817.5 million tonnes produced last year, citing oversupply concerns in export markets. However, it has since reviewed the cap amid stronger coal prices and the need to secure additional domestic supplies.

Last month, a senior ministry official told Petromindo the government was considering adding up to 100 million tonnes to this year's production quota as part of a broader review of coal output limits.

PLN President Director Darmawan Prasodjo said earlier this month the utility had been allocated an additional 1.8 million tonnes of medium- to high-calorific-value coal in July, on top of its existing contracted supply.

From August through December, PLN will receive an additional 3 million tonnes of coal per month under the special government allocation, he said.

The additional supplies, consisting of coal with a calorific value of at least 4,500 kcal/kg, are expected to increase available generating capacity in the Java power system by about 5 gigawatts, significantly improving electricity reliability following widespread supply constraints earlier this year.

Indonesia has been seeking to secure additional coal supplies for PLN after the utility faced shortages of medium- and high-calorific-value coal, contributing to power supply disruptions and rolling blackouts in parts of Java and Sumatra earlier this year.

The government has said revisions to miners' RKABs will continue to be assessed based on domestic requirements, market conditions and their contribution to state revenue, while any additional production beyond PLN's needs has yet to be approved.

Editing by Reiner Simanjuntak