By Dominikus
Indonesia is aiming to maintain its coking coal production at 11.8 million tons in 2025—the same target set for 2024, according to the Directorate General of Mineral and Coal under the Ministry of Energy and Mineral Resources (ESDM). This figure marks an increase from the actual 2023 output of 9.8 million tons, which represented a notable rise from previous years. The update was shared by Andri Wijayanto, Head of the Division for Production and Utilization of Mineral and Coal, during an event last week.
Although Indonesia is a global leader in thermal coal exports, its coking coal sector—crucial for steelmaking—remains relatively small. Out of 885 valid coal mining permits nationwide, only seven companies currently produce metallurgical-grade coal. Most of Indonesia’s output consists of semi-soft coking coal and low-volatile pulverized coal injection (PCI) coal, both of which are priced significantly lower than globally traded premium hard coking coal.
As of mid-2025, global prices for premium hard coking coal (HCC) range between US$240–270 per ton (FOB Australia), while semi-soft coking coal typically trades at US$120–160 per ton, depending on sulfur and ash content. Indonesian semi-soft coal generally commands prices at the lower end of this range due to its lower swelling index and higher ash content, making it less attractive for high-grade steel producers in markets like Japan and South Korea.
Indonesia holds an estimated 2.67 billion tons of metallurgical coal resources and 444.97 million tons of reserves. These are primarily located in Central Kalimantan, which alone accounts for 2.39 billion tons of resources and 415 million tons of reserves. Other producing regions include East Kalimantan, West Sumatra, and Bengkulu. However, logistical constraints—especially in inland areas of Kalimantan—continue to pose significant challenges to cost-effective transport and export.
Read also: Report: Indonesian coal industry must diversify or risk decline
Despite its resource potential, Indonesia remains a net importer of coke and semi-coke. In 2023, the country imported 2.47 million tons—90% of which came from China—while exporting 1.58 million tons, with India receiving about half of the total exports. This trade imbalance underscores a structural weakness in Indonesia’s steel value chain, which continues to depend heavily on imported coke for industrial use.
To address this, the Indonesian government has launched a range of downstream development initiatives. These include promoting the construction of domestic coke plants and encouraging investment in steelmaking facilities that utilize local coking coal. The goal is to enhance energy security, boost domestic value addition, and reduce exposure to volatile global supply chains.
Looking forward, global demand for metallurgical coal is projected to reach 393.3 million tons by 2025, led by major consumers such as China (127.3 Mt), India (84.7 Mt), and Japan (45.8 Mt). With a production target of 11.8 million tons, Indonesia remains a niche but strategically positioned supplier in the regional market—especially in Southeast Asia—where shorter shipping distances and competitive pricing provide an advantage in the semi-soft and PCI coal segments.
Editing by Reiner Simanjuntak
