Indonesian coal miners and Asian buyers are refraining from signing supply contracts for 2027 due to uncertainty in production quotas and changes in export regulations. These delays come as Indonesia prepares to transition to a new export framework starting January 1, 2027.
Challenges in Supply Contracts
In previous years, negotiations for annual supply typically begin in the fourth quarter, but news sources report slower progress in negotiations this year. Some miners who have initiated talks are changing contract terms and adding clauses that condition supply on approved production quotas (RKAB) and domestic market obligations (DMO).
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These clauses are designed to protect miners against contractual disputes in the event of receiving production quotas lower than expected or a reduction in the amount of coal available for export after meeting domestic needs. An Indonesian miner stated, "We may sign a general contract for 2027 that is conditional on RKAB approval. The aim of this move is to protect miners against disputes in case of low production approvals."
Uncertainty in Export Monitoring System
Uncertainty in Indonesia's new export monitoring system is another factor influencing delays in negotiations. PT Danantara Sumberdaya Indonesia (DSI) has announced that its primary role will focus on monitoring and facilitating exports, while trade relations between miners and foreign buyers continue.
However, the market is still assessing how this system will operate in practice starting January 1. In 2026, current exporters will be allowed to continue their activities and provide additional information under the new monitoring system. Some miners are also seeking contractual protection against potential changes in export procedures or the level of oversight that DSI introduces.
Market participants predict that Indonesia's coal production in 2026 will be around 720 to 730 million metric tons. This compares to approximately 790 million tons in 2025. Some market sources expect the government to maintain production at a similar level in 2027.
The tight supply situation has led to increased prices for Indonesian coal in 2026. The FOB Kalimantan price for coal with a calorific value of 4200 kcal/kg has risen from $45 to $78.55 per ton. This situation clearly indicates the need for close monitoring of production quotas and DMO requirements.
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