Indonesia Increases Coal Production

 With the rise in international coal prices, Indonesia plans to increase coal production.

 Indonesian Minister of Economic Coordination Airlangga Hartarto recently stated that President Prabowo Subianto has instructed officials to revise the 2026 annual production quota, with plans to increase the country's coal output. Airlangga also revealed that the government is re-examining the coal export tax and plans to increase the rate in line with the rise in international coal prices.

 Indonesia is the world's largest exporter of thermal coal, accounting for about half of the global export volume, with over 60% of its exports going to China and India. Data from the Indonesian Coal Mining Association shows that the country's actual production in 2025 was 0.79 billion tons, with exports of approximately 0.54 billion tons, down 5.5% and 7.9% respectively compared to the previous year.

 Before this policy shift, the Indonesian government had already adjusted its coal policy twice. In January 2026, Indonesia planned to reduce its annual coal production quota from 0.79 billion tons in 2025 to 0.6 billion tons, a decrease of about 18%; it also intended to resume the collection of coal export taxes starting from January 1, ending a nearly 20-year history of tax exemptions.

 In the early stages of the Middle East conflict, President Prabowo stated that Indonesian coal products should not be exported before meeting domestic demand, to ensure the security of the country's energy and important commodity supplies. He emphasized that Indonesia's abundant natural resources must be used to the maximum extent possible for the benefit of its own people, and the government must prioritize national interests when formulating resource management policies.

 Due to the continued rise in international coal prices, Indonesia's coal policy has recently shifted again. As of March 16, the average spot price of thermal coal at Newcastle Port, Australia, was $135.67 per ton, an increase of $20 from the beginning of the month. The price of the Intercontinental Exchange Newcastle coal futures contract for the following month closed at $146.5 per ton on March 20.

 Recently, the rise in international coal prices has begun to affect the domestic coal market as well. Wind data shows that as of March 20, the spot ex-warehouse price of 5500-calorie thermal coal at Qinhuangdao Port was 735 yuan per ton, an increase of 9.21% year-on-year and 0.82% week-on-week; the spot reference price of thermal coal in the Bohai Rim region was 737 yuan per ton, an increase of 0.14% week-on-week. During the traditional off-season for coal consumption, domestic coal prices have begun to stabilize and rise.