The Indonesian Coal Mining Association (ICMA-APBI) has warned that abrupt policy shifts could jeopardize the Indonesian coal industry, threatening both national energy security and regional economic stability.
- Production Cuts: The 2026 RKAB coal production quota has been reduced to 600 million tonnes, down from 790 million tonnes last year.
- Increased Obligations: The domestic market obligation (DMO) requirement has risen from 25% to 30%.
- Employment Risk: Regulatory uncertainty has led some companies and contractors to consider layoffs affecting thousands of workers.
The Strategic Value of Coal
Speaking at an Energy Discussion hosted by the Energy and Mining Editor Society (E2S), APBI Chairman Priyadi described coal as a critical pillar for foreign exchange and energy security. While acknowledging that the industry faces criticism as a “dirty energy source,” Priyadi argued that coal remains highly competitive.
Indonesia maintains significant reserves of approximately 39 billion tons and resources of 96 billion tons. Priyadi noted that these assets allow the nation to rely on internal resources for electricity and electrification without depending on volatile global supply routes like the Strait of Hormuz.
Regulatory Pressures and Policy Shifts
The association expressed concern over the industry’s vulnerability to sudden regulatory changes, noting that mining projects require long-term planning for feasibility and environmental approvals. Priyadi specifically highlighted challenges regarding the miners’ Work Plan and Budget (RKAB).
The Ministry of Energy and Mineral Resources has shortened RKAB validity from three years to one year. Additionally, the government is considering an export tax to increase state revenue alongside the tightened production quotas.
Socio-Economic Risks in Mining Regions
Priyadi warned that sudden policy restrictions could trigger a negative multiplier effect on employment. Because the industry relies heavily on contractors, regulatory uncertainty has already prompted some firms to weigh large-scale layoffs.
Beyond employment, the association emphasized that mining activities have historically improved infrastructure and accessibility in remote areas. Disruptions to these operations could devastate local economies that depend on coal-related revenues.
Priyadi urged policymakers to conduct integrated assessments, warning that rising unemployment in mining regions could lead to broader social instability and increased crime.
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