Sangatta, East Kalimantan. Local authorities in Indonesia’s coal heartland of Kutai Timur are preparing contingency measures for potential job losses in the mining sector as the central government considers reducing national coal production quotas from record levels.

Regent Ardiansyah Sulaiman said the district is working with mining companies to expand worker retraining programs and reduce the risk of unemployment if output restrictions are implemented.

The warning comes as Indonesia considers scaling back coal production in 2026 to around 600 million tons, from a record 790 million tons in 2025, although officials have recently signaled flexibility on the final quota.

Indonesia is one of the world’s largest coal exporters, with Kalimantan Timur serving as its primary production hub. The province accounts for roughly 55% of national output, or more than 436.7 million metric tons annually, and dominates production across Kalimantan, which supplies over 82% of Indonesia’s coal needs.

Kutai Timur, one of the key mining districts in the province, is heavily exposed to the sector. As of August 2025, about 8.59% of employed workers in the region were in mining, equivalent to roughly 169,341 people out of 1.97 million workers, underscoring the labor sensitivity to any production slowdown.

“Being one of the national coal suppliers, this policy discourse could have significant economic and social impacts, especially on employment,” Ardiansyah said in Sangatta.

As part of its mitigation strategy, the local government is partnering with mining companies to provide vocational training aimed at transitioning workers into agriculture, plantations, fisheries, and small businesses.

One example cited by the government is contractor Pamapersada Nusantara, which has conducted skills training programs in the Bengalon district to prepare workers for alternative livelihoods.

The regency government said it hopes such initiatives will be expanded across the industry to cushion the impact of any restructuring in the coal sector.

Kutai Timur officials are also scheduled to meet the Energy and Mineral Resources Ministry (ESDM) to discuss the regional implications of potential production cuts. The meeting, initially planned for June 18, has been postponed and is expected to be rescheduled next week.

Local authorities plan to raise concerns that lower production quotas could slow regional economic activity, increase unemployment, raise poverty levels, and create broader social pressures in coal-dependent districts.

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