Coal in Kalimantan: the basics for investors

Kalimantan is the centre of Indonesia’s coal industry, and Indonesia exports more coal than any other country. Most of it is thermal coal for power stations. It’s mined from open pits and moved by truck, river barge and ship to buyers across Asia.

For an investor, the coal in the ground is rarely the hard part. What a deposit is worth depends on its grade, its licence, the cost of getting it onto a vessel and a set of state rules on volume, price and sales that changed often in 2025 and 2026.

Where the coal is mined

East Kalimantan is Indonesia’s largest coal-producing province and South Kalimantan is the second. With smaller output from Central and North Kalimantan, the island supplies most of the country’s coal. South Sumatra is the main producer outside Kalimantan.

In East Kalimantan, the main mining districts include Kutai Kartanegara, East Kutai and Berau, and mines reach into the city of Samarinda, the provincial capital. In South Kalimantan they follow a belt from Tabalong and Balangan in the north through Tapin and Banjar to Tanah Laut, Tanah Bumbu and Kotabaru in the south-east. Central Kalimantan’s coal comes mostly from the upper Barito basin, and Murung Raya there also holds metallurgical (coking) coal for steelmaking. North Kalimantan’s mines include sites in Bulungan and Nunukan and around Tarakan. Each province’s wider economy is covered in the five provinces compared.

There’s plenty of coal left. The Geological Agency put Indonesia’s coal resources at 97.96 billion tonnes and its reserves at 31.96 billion tonnes at the end of December 2024. Reserves are the part judged economic to mine, so they move with prices, costs and licence boundaries.

What Kalimantan coal is like

Coal is sold on its calorific value, the heat it gives off when burnt, measured in kilocalories per kilogram. In Indonesia it’s usually quoted on a gross as-received basis (GAR), which measures the coal as shipped, water included. The ministry’s reference price is set for four bands, at 6,322, 5,300, 4,100 and 3,400 kcal/kg GAR, which gives a fair picture of the range sold.

Most Indonesian coal sits in the middle and lower bands, and the Geological Agency classes roughly two-thirds of the country’s coal resources as low-calorie coal. Kalimantan coal’s strengths are low sulphur and low ash, which matter to power plants that face emission limits and pay to dispose of ash. Its weakness is moisture. The lower the calorific value, the wetter the coal, so each tonne shipped carries less heat and costs more to move per unit of energy.

Grade varies from seam to seam, even inside one concession. That’s why laboratory data by seam matters more than the name of the district. How grade turns into a selling price is covered in how Indonesian coal is priced.

Who buys it

Indonesia produced a record 836 million tonnes of coal in 2024. Output fell to about 790 million tonnes in 2025, according to the energy minister on 8 January 2026: about 514 million tonnes were exported, about 254 million tonnes were sold at home and the rest went into stock. The International Energy Agency counted Indonesia as the largest coal exporter in 2024, with 555 million tonnes, mostly thermal coal.

China and India are the largest buyers. The Philippines, South Korea, Japan, Malaysia, Vietnam, Taiwan and Thailand take most of the rest. The agency describes Indonesia as Asia’s swing supplier, which means its exports rise and fall with demand in China and India. In 2025 they fell.

At home, most coal goes to power stations, both those of the state power company PLN and private ones. Smelters, cement makers and fertiliser plants buy much of the rest. Every miner has to sell part of its output in Indonesia, under rules covered in the domestic market obligation.

The state also sets how much each mine may produce. For 2026 the ministry planned to cut national output to around 600 million tonnes through its approvals of each mine’s work plan and budget (Rencana Kerja dan Anggaran Biaya, RKAB), which became annual again from 2026. In June 2026 the minister said quotas could be relaxed if prices held up. Exports changed too. Since 1 June 2026, coal exporters have had to report their sales to a state export company, PT Danantara Sumberdaya Indonesia, which is due to become the only coal exporter from 1 January 2027.

Who holds the licences

Two groups of producers share the industry. The first holds coal contracts of work (Perjanjian Karya Pengusahaan Pertambangan Batubara, PKP2B), signed with the central government from the 1980s onwards. They include several of the largest mines. The seven first-generation contracts ended between November 2020 and April 2025, and each one continued as a special mining business licence (IUPK). In November 2025 the ministry still counted 59 PKP2B contracts in force.

The second group holds ordinary mining business licences (Izin Usaha Pertambangan, IUP). Many date from the period up to the mid-2010s, when district heads issued mining licences. In November 2025 the ministry counted 871 coal IUPs, 854 of them at the production stage. The quality of their records varies widely, and that’s where most of the checking goes. The differences between the licence types are set out in coal licences.

Investors rarely buy coal land as such. They buy into a company that holds a licence, and a change of shareholders needs the ministry’s approval.

Where to start

Before you spend money on a site visit, ask for these:

• the licence number, holder, stage, expiry date and area, so they can be checked against the ministry’s records
• this year’s approved RKAB and the production quota it sets
• laboratory results by seam for calorific value, total moisture, ash and sulphur
• the route from pit to ship, with haul road, jetty and river distances and what happens in the dry season
• the mine’s record on domestic sales, royalties and reclamation guarantees

Then price the deposit on its own grade and logistics, and on today’s rules, rather than on a neighbouring mine’s results.