Indonesian miners have halted spot coal exports after the government proposed deep production cuts, leaving Asian buyers unable to secure supplies from the world's largest exporter, industry officials said on Tuesday.

Indonesia last month issued output quotas to major miners that were 40% to 70% lower than 2025 levels as part of a plan to cut production by nearly one quarter and boost prices. The country's main industry body has opposed the move, warning it could trigger layoffs and mine closures.

"Production is still ongoing but not at full capacity, and coal shipments will be limited until a final decision is made on the government quotas," H. Kristiono, deputy chairman of the Indonesian Coal Mining Association, told Reuters, adding that no spot cargoes were being offered.

Long-term contracts are still being honoured, though some miners are considering cancellations on grounds of unforeseen circumstances, Kristiono said.

The proposal marks Indonesia's latest policy-driven supply disruption, aimed at boosting government revenues amid softer demand from top buyers China and India. A brief export ban in 2022 sent prices sharply higher.

Indonesia accounted for half of the 960-million metric tons of electricity-grade coal exported globally in 2025, according to Kpler data. It is now weighing a 24% production cut to about 600-million tons, even though exports alone exceeded 510-million tons last year.

Traders expect the proposed curbs to push up prices and tighten supply.

Indonesian spot coal cargoes were not being sold even at premiums of $1-$2 per ton over current prices, an Indian trader said at the Coaltrans India conference in New Delhi.

Spot shipments are unlikely to resume this quarter unless Indonesia eases the output cuts, a Singapore-based trader said. Both traders declined to be named as they were not authorised to speak to the media.

POLICY IMPACT

Prices of lower-grade 4 200 kcal/kg Indonesian coal rose about 7% in January, according to India-based coal trader I-Energy Natural Resources, after reports of proposed production cuts in the month's first week.

Lower-grade coal makes up most of Indonesia's exports, and its prices could rise 40% to 70% if output is reduced by 20%, while higher-grade coal could rise 10% to 20%, London-based DBX Commodities said.

"The supply shock from Indonesia is driving other coal premiums up. Bids from Japan, China and Korea are going up as they are looking for stable supplies," a coal trader at a major Asian utility said.

However, industry participants said buyers' preference for higher-grade coal from other suppliers, and continued weak demand from China and India, could limit any sharp rise.

"A policy reversal under labour or fiscal pressure, sharper-than-expected slowdown in top buyer China and sustained low gas prices could mute a desired upside to coal prices," said DBX Commodities CEO Alexandre Claude.

Vasudev Pamnani, director at I-Energy Natural Resources, said he expected short-term supply and price shocks for Indian buyers.

"But if the cuts continue, India has the option to diversify and import from Russia, South Africa and Mozambique," he said.