Jakarta. A senior official said Wednesday that the government would raise the coal production quota to exceed 600 million tons.

Indonesia had previously capped the annual production of the pitch-black combustible rock at 600 million tons, a huge drop from the previous year’s output of 790 million tons. 

“Yes, definitely,” Deputy Energy Minister Yuliot Tanjung said on raising the quota to beyond 600 million tons, as reported by the state news agency Antara.

“We will adjust [the quota] to the domestic demand”.

The government has evaluated the domestic coal demand, including how much the state-run energy firm PLN needs to run its power plants. According to Yuliot’s estimates, PLN has secured contracts for 134 million tons of coal but still requires around 20 million tons more for its power generation needs.

"We are working to fill the 20 million tons shortfall," Yuliot said.

Energy Minister Bahlil Lahadalia had previously signaled possible relaxation of coal production as the commodity’s price soars following the US-Iran war. Indonesia has set the coal reference price at $123.91 per ton for the second half of June 2026. Prices were at $121.83 per ton in the first half. This also marked quite a jump compared to the $116.32 reference price set for the last two weeks of May.

The earlier quota cuts stemmed from the supply-demand imbalance in the international market throughout 2025. Coal prices even touched $97.65 per ton in the second half of July 2025. The US-Iran war had now caused coal prices to skyrocket from below $120 per ton to above $130 per ton in early March 2026.