The coal industry has a very important role for the energy and economy sector in Indonesia. Coal is a mainstay commodity that contributes greatly to national economic growth. The largest coal mines in Indonesia are spread on various islands, like in Kalimantan, Sumatra, to Papua.
With the proposal of an abundance of coal, Indonesia is known as one of the largest coal producers and exporters in the world. From the Ministry of Energy and Mineral Resources data, national coal production per 15 November this year has touched 711,37 ton. This amount exceeds the targeted targeted for 2024, namely as much 710 ton.
As an increase in international market demand, Coal companies in the country continue to improve quality and develop their production. Through this article, Let's get to know the biggest coal mines in Indonesia and their contribution to the country's economy.
Getting to Know Coal Mines in Indonesia
Coal mining is the activity of extracting coal from the ground to meet energy needs. Coal is formed from the remains of ancient plants that have decomposed and been buried for millions of years under high pressure and temperature.
Mining stages coal starts with exploration to determine the location and content of coal in the ground. After that, Mine planning is carried out which includes mine design, excavation method, as well as environmental management measures.
The most common mining method in Indonesia is open pit mining (open-pit mining) and underground mining (underground mining). After mining, The material is transported to the processing facility to be destroyed and cleaned. The processed coal is then stored before distribution.
Apart from being a source of energy for generating electricity, Coal is also used as a fuel in the manufacture of cement, baja, textile, chemical industry, pharmacy, and others. Coal is also processed into various derivative products, such as coke for metallurgy and coal gasification to produce liquid or gas fuel.
Coal is one of Indonesia's main export commodities and is also the foundation for meeting domestic energy needs. Therefore, Coal industry management is carried out strictly to support economic sustainability and protect the environment.
Coal companies also collaborate with local governments to improve the economy of communities around mining areas. Programs such as economic empowerment, entrepreneurship training, until the restoration of ex-mining land becomes part of the company's social responsibility.
List of the Largest Coal Mines in Indonesia and Their Total Production
A number of coal mines have been known and recognized as big players in the international market. These companies export coal to various countries, starting from China, India, Japan, American, Middle East, Europe, American, to Africa.
Along with massive coal processing and exports, Many coal companies can produce production volumes reaching tens of millions of tons per year. The following are some of the largest coal mines in Indonesia:
1. PT Bumi Resources Tbk (EARTH)
One of the largest coal mines in Indonesia is owned by PT Bumi Resources Tbk (EARTH). This company under the Salim and Bakrie Group reported an increase in coal production of 7%. Previous production reached 35,4 million tons in the first semester of 2023, increasing to 37,7 million tons in semester I-2024.
The increase in production is also reflected in the increase in semester coal sales 1-2024 who reaches 37 million tons, higher in comparison 34,6 million tons in the previous year. The increase in production was influenced by more optimal contractor performance and lower rainfall in the PT Kaltim Prima Coal mining area (KPC).
BUMI targets coal production of 78-82 million tonnes a year 2024. With coal reserves of 2,4 billion tons and the resource potential reaches 6,81 billion tons, This company is optimistic that it can maintain production at least 30 next year. The targeted average annual production is: 80 million tons.
2. PT Kaltim Prima Coal (KPC)
As a subsidiary of PT Bumi Resources Tbk, PT Kaltim Prima Coal (KPC) operates one of the mines open-pit The largest in the world is located in East Kalimantan. PT KPC targets coal production of 53,5 million tons per year 2024.
This target is part of the Work Plan and Cost Budget (RKAB) which has been approved by the Ministry of Energy and Mineral Resources (EMR) for the period 2024-2026. This production will remain at the same figure for the rest of the year 2026, reflects stability in the company's production plans
KPC focuses on coal mining and marketing activities based in East Kalimantan and has been operating since 1992. With a concession area of 80.000 hectare, KPC produces approx 70 million tons of coal every year which is marketed for both domestic and international needs.
3. PT Adaro Energy Tbk (ADRO)
Coal company PT Adaro Energy Tbk (ADRO) conglomerate Garibaldi Thohir also recorded an increase in coal production and sales volumes. Both their coal production and sales increased by 7%, with a total reach 35,74 million tons and 34,94 million tons.
However, this increase was accompanied by an average decrease in coal prices (ASP) shrink 19%. Garibaldi Thohir as President Director and Chief Executive Officer of ADRO acknowledged the challenges related to fluctuations in thermal and metallurgical coal prices.. Nevertheless, he remains optimistic about the resilience of the Adaro group's performance.
4. PT Bayan Resources Tbk (THEN)
The other largest coal mine in Indonesia is the company PT Bayan Resource Tbk. This company owned by Low Tuck Kwong also recorded an increase in production of 6,22% in the semester 1-2024. The production becomes 25,6 million tons or up from 24,1 million tons in the same period the previous year.
5. PT Golden Energy Mines, Tbk. (GEMS)
PT Golden Energy Mines Tbk (GEMS) from the Sinarmas group reported the total production of 24,8 million tons during semester I-2024. Corporate Secretary GEMS, Sudin, mention that this number has reached 49,6% from the annual GEMS production target for 2024, that is equal 50 million tons.
6. Pt Bukit Asam TBK (PTBA)
Pt Bukit Asam TBK (PTBA) recorded coal production of 18,8 million tons during the semester 1-2024. State -owned coal mining managed to set the highest sales record for the six -month period. Sales reach 20,1 million tons or increase 15% Compared to semester I-20123.
Corporate Secretary of PTBA, Niko Chandra, explained that PTBA plans to increase the sales volume of the year. The strategy implemented is to optimize the domestic market while taking advantage of export opportunities to countries that have high growth potential.
7. PT Indika Energy Tbk (INDY)
PT Indika Energy Tbk (INDY) actually reported an annual decline in coal production, in line with the company's steps to diversify and reduce dependence on the coal sector. During the I-2024 semester, INDY produces 14,9 million tons of coal or a slight decrease in comparison 15 million tonnes a year 2023.
8. PT Indo Tambangraya Megah Tbk (ITMG)
Other coal companies, PT Indo Tambangraya Megah Tbk (ITMG) also recorded an increase in production of 13,41% in the semester 1-2024. This company, part of the Banpu Group, achieved total production 9,3 million tons, increased from 8,2 million tons in the same period last year.
Latest Information on Coal Production in Indonesia
Coal production in Indonesia has continued to increase in recent years, with the highest record in the year 2023 as big as 775.182 ton. The following are statistics on the development of domestic coal production:
- Year 2020: Indonesia's coal production is 564 million tons
- Year 2021: Indonesia's coal production is 614 million tons
- Year 2022: Indonesia's coal production is 687 million tons
- Year 2023: Indonesia's coal production reaches 775.182 ton
In mid-November 2024, national coal production reached 711,37 million tons, exceeded the government's target of 710 million tons for this year. It is estimated that total production will reach 800 million tons by the end of the year.
The coal sector alone contributes approx 100 trillion rupiah in Non-Tax State Revenue (PNBP) on 2023. Besides that, this industry has created more than 330 thousand jobs and allocate approx 2,5 trillion rupiah for community empowerment programs around mining areas.
Although production succeeded in exceeding targets, there are challenges in the coal export market. The Ministry of Energy and Mineral Resources said that the government is encouraging diversification of export markets to developing countries in the African region, South Asia, and Southeast Asia which still depends on fossil energy.
This step is a response to a World Bank report which predicts a decline in coal consumption will begin 2025 and is expected to get sharper in 2026. This prediction is based on a projected decline in demand from China, Europe, and the United States (AS).
According to the World Bank, decrease in coal demand on 2026 caused by the increasing use of renewable energy-based power plants (EBT) and natural gas replacing coal-based power plants.
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