Indonesia faces the expiry of operating permits for coal mines with a combined capacity of about 760 million tonnes per annum (Mtpa) by 2035, accounting for roughly two-thirds of the global total set to leave production in that period, according to a new analysis by Global Energy Monitor (GEM).

Worldwide, about 1.15 billion tonnes per year of coal mining capacity is expected to reach the end of its approved operating period by 2035. Sxcoal has prepared an interactive summary of the GEM analysis, please Check Here.

The expiry of mining permits does not mean operations will automatically stop, as companies can apply for extensions or transition to new licensing arrangements subject to government approval. Under Indonesia's mining regulations, operating permits may be extended if companies meet requirements related to production performance, environmental obligations and regulatory compliance.

However, the scale of upcoming permit renewals could become an important policy issue for Indonesia, the world's largest thermal coal exporter, as the government seeks to balance export revenues, energy security and its long-term energy transition goals.

At the same time, Indonesia has plans for roughly 17 Mtpa of new coal mine capacity. It also ranks among the top 10 countries for idle coal mining assets, with about 18 Mtpa of inactive capacity.

Dorothy Mei, project manager for GEM's Global Coal Mine Tracker, warned that adding new capacity amid shifting energy markets risks creating long-lived assets that could become uneconomic over time, exposing companies, governments and investors to stranded-asset risks and greater market volatility.

Indonesia produced more than 800 million tonnes of coal in recent years, driven primarily by demand from major buyers such as China and India. Its abundant reserves and competitive production costs have made the country a key supplier to Asian power markets, particularly for lower-calorific coal consumed by coastal power plants.

At the same time, the government has tightened oversight of the mining sector through stricter controls on production quotas, licensing and compliance. Since 2025, miners have been required to submit annual work plans and budgets, known as RKAB, giving authorities greater control over production levels and resource management.

The Ministry of Energy and Mineral Resources has also increased enforcement against non-compliant operators. In 2025, the government suspended 190 mineral and coal mining permits after reviewing issues including reclamation obligations and compliance with approved work plans.

The permit expiry issue comes as Indonesia's coal industry faces a more challenging market environment. Global coal demand growth has slowed, while China, Indonesia's largest export market, has relied more on domestic coal output and accelerated renewable energy development.

The industry has also faced uncertainty over future production targets. Indonesia initially set a lower coal production quota for 2026 at around 600 million tonnes, although discussions later emerged over upward revisions as the government weighed market conditions, state revenues and industry concerns. Market participants widely believe that the overall addition would not be large.

However, the immediate impact on supply is limited, as most affected mines still have several years before their permits expire and extensions remain possible. The issue is more likely to influence Indonesia's coal supply outlook beyond 2030, when production growth may depend increasingly on regulatory policies rather than resource availability.

The development also highlights the broader challenge facing Indonesia's coal sector. While coal remains central to the country's power generation and export earnings, the government is under growing pressure to align mining policies with its energy transition commitments.