Some major coal miners in Indonesia have received approved Work Plan and Budget (RKAB) allocations for 2026 that fall significantly short of their submitted proposals, sources said, despite the final national coal production target remaining undetermined.

While the Ministry of Energy and Mineral Resources (ESDM) indicated early January a potential 2026 national coal quota of around 600 million tonnes, down from an estimated output of 790 million tonnes in 2025, individual RKAB decisions are rolling out on a case-by-case basis.

The selective approvals, which in several cases slash volumes by 40-80% below miners' submitted proposals, sources disclosed. However, several prominent miners reportedly received approvals matching or close to their submissions.

The ministry has yet to confirm the aggregate 2026 quota or complete all approvals. Under earlier rules, miners with pending RKABs are allowed to produce up to 25% of their approved 2026 output under the previous three-year mechanism in the first quarter.

The ESDM reverted the RKAB validity to annual terms from three years and required re-applications, part of the move to provide greater flexibility in managing production amid market volatility, officials said. Officials have emphasized that the policy aims to prevent oversupply, underpin prices, and ensure sustainable mining practices.

While some miners continue to await clarity on remaining approvals, industry chatter suggests the existing cuts have already shored up sentiment and offer prices.

Some Chinese participants expect supply from Indonesia to be under constraints at least in the first quarter, yet no panic buying has emerged so far, while keeping monitoring further approvals for clearer signals on supply tightness in the global thermal coal market.

Supply has recently faced constraints, not only due to reduced mining quota, but also continued rainfalls that curtailed production and logistics, the ongoing supply disruption from South Sumatra due to bans on coal transport on the public roads, and the coal export duty, which is still under discussion and likely in the range of 5-8%.