At the beginning of 2026, Indonesia reduced its national coal production quota from 790 million tons to 600 million tons. The policy was designed to stabilize global coal prices amid oversupply concerns.
While the decision may support market balance, it also introduces significant challenges for employment across the mining sector.
Contractors Face the First Impact
Mining contractors perform the majority of coal extraction activities in Indonesia. As production quotas decline, heavy equipment utilization drops, operational activities slow down, and contract renewals become uncertain.
The effects extend far beyond mine sites, impacting logistics operators, barge companies, heavy equipment workshops, and fuel suppliers.
Tens of Thousands of Jobs Could Disappear
Industry estimates suggest that every one million tons of coal production supports approximately 400–500 direct jobs.
With production reduced by 190 million tons, the industry could face substantial workforce reductions. Some estimates indicate that up to 100,000 workers across the mining services supply chain may be affected directly or indirectly.
A Domino Effect Across Local Economies
The reduction in mining activity is expected to affect:
Mining contractors
Hauling services
Barge and shipping operators
Heavy equipment workshops
Industrial fuel suppliers
Catering and accommodation services
Local SMEs
Regional government revenue
Coal-producing provinces such as East Kalimantan are likely to experience the strongest economic impact.
Rising Concerns Over Unemployment
Industry associations report that workforce reductions have already begun in several mining operations.
Without workforce transition programs and investment in downstream industries, mining regions may face increased unemployment and social pressure.
Conclusion
Indonesia's 2026 RKAB coal policy highlights the complex balance between market management and employment protection. Policymakers may need complementary measures to support workers, sustain regional economies, and maintain long-term industry resilience.
