Jakarta. Moody’s Ratings has downgraded Bayan Resources’ outlook to negative from stable, citing regulatory uncertainty over the Indonesian government’s approval of annual coal production quotas, while maintaining the miner’s Corporate Family Rating (CFR) at Ba1.

The uncertainty has prompted Bayan, owned by Low Tuck Kwong, to declare force majeure on its coal supply obligations, Moody’s Ratings Assistant Vice President Anthony Prayugo said.

“If the uncertainty is not resolved promptly, it could constrain production and weigh on revenue,” Anthony said.

Without additional production quotas, Bayan’s output is expected to reach only around 39 million metric tons in 2026, down sharply from 68 million metric tons in 2025.

The uncertainty also makes it more difficult for the company to achieve its target of increasing production toward a capacity of around 80 million metric tons over the next few years.

Moody’s projects Bayan’s earnings before interest, taxes, depreciation and amortization (EBITDA) to decline to US$700 million in 2026 from $1.1 billion in 2025.

If production remains at 39 million metric tons in 2027, EBITDA could fall further to between $400 million and $500 million, assuming an average selling price of $48 per metric ton.

The projections are significantly below Moody’s previous expectations, which had anticipated annual EBITDA of around $1 billion as production continued to increase toward 80 million metric tons.

Despite the weaker earnings outlook, Moody’s expects Bayan’s adjusted debt-to-EBITDA ratio to remain below 0.5 times over the next two years.

The rating agency also expects the company’s liquidity to remain very good over the next 18 months.

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