Kutai Kartanegara, E. Kalimantan. More than 15,000 workers at coal mining companies in East Kalimantan province face potential layoffs as the government has yet to process the extension of 26 mining permits that have been pending for six months, workers' representatives said.

The uncertainty has forced several mining companies in Kutai Kartanegara Regency to halt operations, raising fears of wider job losses in one of Indonesia's largest coal-producing regions.

Workers say companies could classify the prolonged permit delays as a force majeure event, allowing them to terminate employees without severance pay if operations cannot resume.

"The permit applications have not progressed until now, and the impact is enormous," Gendut Supriyanto, coordinator representing employees of companies affected by the 26 mining business permits (IUPs), told Beritasatu.com on Monday.

According to Gendut, approximately 15,080 employees are directly affected because mining activities have been suspended while companies await permit renewals.

The layoffs have already begun. As of June, five mining companies whose permits remain pending had dismissed about 1,070 workers, he said.

Workers are urging the government to expedite the permit renewal process to prevent further layoffs and limit the economic impact on communities that rely heavily on the mining industry, particularly around Indonesia's new capital, Nusantara, in East Kalimantan.

The warning comes as Indonesia considers reducing its coal production target to around 600 million metric tons in 2026, down from a record 790 million tons produced in 2025, although government officials have recently indicated the final production quota remains under review.

Indonesia is one of the world's largest thermal coal exporters, with East Kalimantan serving as the country's main production hub. The province accounts for roughly 55% of national coal output, producing more than 436 million metric tons annually, while the island of Kalimantan contributes more than 80% of Indonesia's total coal production.

The latest concerns also add to anxieties over the labor market in Southeast Asia's largest economy. Manpower Ministry data show more than 88,000 workers lost their jobs in 2025, while another 23,470 workers were laid off between January and May 2026. Between 2020 and 2025, nearly 706,000 workers were affected by layoffs nationwide.

In response to mounting job losses, President Prabowo Subianto's administration has established a Layoff Mitigation Task Force after labor unions warned that as many as 150,000 jobs could be at risk across several industries, including approximately 55,000 positions in the ceramic sector.

State Secretary Prasetyo Hadi, who heads the task force, said the government, parliament, and labor unions are mapping companies facing financial distress to identify measures that could prevent further layoffs.

"We are identifying which companies face problems and what those problems are so that mitigation measures can be taken," Prasetyo said after meeting lawmakers and labor representatives in late June.

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