ASIATODAY.ID, JAKARTA — Indonesia is preparing a decisive shift in its mining policy.
The government has confirmed plans to cut nickel and coal production targets in 2026, aiming to curb oversupply, push commodity prices higher, and maintain the sector’s crucial contribution to state revenue.
Minister of Energy and Mineral Resources Bahlil Lahadalia said the production cuts will be implemented through the 2026 Work Plan and Budget (RKAB) for mining companies. The move comes amid growing concern that excessive supply—particularly from Indonesia—has dragged global prices down.
“Everything will be cut. Not only nickel, but coal as well,” Bahlil said after a press conference on Indonesia’s energy sector readiness for the Christmas and New Year holiday period in Jakarta on Friday, December 19, 2025.
Indonesia Supplies Nearly Half of Global Coal Trade
Bahlil explained that coal prices have fallen sharply due to massive global supply, with total coal traded worldwide reaching around 1.3 billion tonnes. Indonesia alone accounts for nearly half of that volume.
“Indonesia supplies about 500–600 million tonnes, almost 50 percent of global supply,” he said.
This dominance, he acknowledged, has contributed to a sustained decline in coal prices. Since November, the coal reference price has dropped to US$98.26 per tonne, down significantly from US$114.43 per tonne at the end of 2024.
To address the situation, the government will tighten oversight of mining companies, particularly those failing to comply with production rules.
“For companies that do not comply with regulations, we will review their RKAB approvals,” Bahlil warned.
Production Cuts Planned as Revenue Remains Strong
Despite plans to rein in output, Indonesia’s energy and mineral sector continues to deliver robust fiscal returns.
As of December 18, 2025, non-tax state revenue (PNBP) from the Energy and Mineral Resources sector has reached IDR 228.05 trillion, reinforcing its role as one of the country’s main revenue pillars.
Gita Lestari, Head of the Bureau of Communication, Public Information Services, and Cooperation at the Ministry of Energy and Mineral Resources, said the achievement reflects strong coordination across government units and stakeholders.
“This achievement shows that natural resource governance is becoming more accountable and continues to deliver maximum benefits for public welfare,” Gita said in Jakarta quoted on December 22, 2025.
Minerals and Coal Remain the Largest Contributors
The minerals and coal subsector remains the largest contributor to Energy and Mineral Resources non-tax revenue, generating IDR 124.63 trillion. This is followed by the oil and gas sector, which contributed IDR 91.82 trillion, while geothermal energy added IDR 2.45 trillion. Contributions from business levies and technical service fees totaled IDR 9.15 trillion.
Gita noted that PNBP is recorded jointly by the Ministry of Energy and Mineral Resources and the Ministry of Finance in line with state budget mechanisms.
Internal Energy and Mineral Resources records show that technically managed revenue has already exceeded its target, reaching IDR 130.71 trillion, or 102.57 percent of the goal.
Government Targets IDR 256 Trillion in 2025 Energy and Mineral Resources Revenue
With the fiscal year nearing its close, the government remains optimistic that the 2025 Energy and Mineral Resources PNBP target of IDR 256 trillion can still be achieved, even as tighter production controls are prepared for next year.
“With current realization at IDR 228.05 trillion, we are confident the 2025 target can still be met,” Gita said.
Indonesia’s planned production cuts signal a strategic pivot away from volume-driven extraction toward supply discipline and price stabilization, underscoring Jakarta’s intent to balance market control, investment certainty, and long-term state revenue sustainability. (AT Network)
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