LITTLETON, Colorado, Feb 4 (Reuters) - Utilities across Asia are scrambling to plug a potential shortfall in critical coal supplies after miners in the top global coal producer Indonesia halted spot coal exports in protest over government proposals to limit output.

An Indonesian coal mining official said that exports tied to long-term contracts would be maintained, but that spot shipments would be "limited until a final decision is made on the government quotas." The official also warned that even some term contracts are at risk as miners face unforeseen circumstances.

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Indonesia supplied half of all global thermal coal exports in 2025, and is by far the top coal supplier to many of the world's largest coal importers including China, India, Vietnam and the Philippines.

However, an extended stretch of weak global prices has spurred Indonesia's government to propose production cuts and quotas in a bid to drive up export prices and tax revenues.

Indonesian mining firms have also threatened layoffs and mine closures as a result of any forced output cuts, which has put the government under pressure to forge a compromise before mining activity and export flows grind to a halt.

The authorities have proved willing to play hardball with the mining sector before, and briefly suspended coal exports in 2022 due to a shortage of coal supplies at local power plants.

That suspension triggered a steep climb in global coal prices at the time, and benchmark futures on Asian seaborne thermal coal have already climbed 9% to their highest in over a year on the back of the latest intervention.

Further price gains in global coal markets are likely as key importers react to the threat of a steep fall in supplies from Indonesia and attempt to secure replacement volumes from other exporters and trading houses.

WIDE SPAN

Sixteen different nations imported 1 million metric tons or more of Indonesian thermal coal in 2025, data from commodities intelligence firm Kpler shows.

That span of countries ranged from nearby Brunei to China, and includes most of the world's top coal consumers.

However, some countries are more reliant on Indonesian supplies than others, as key countries including China and India depend mainly on domestic mines for most of their coal needs.

That said, several Southeast Asia and South Asia economies are almost entirely dependent on imports for their total coal supplies, and run power systems that use coal as their primary source of electricity.

Further, any sustained fall in Indonesian volumes on global coal markets will have far-reaching impacts, as Asian utilities are already under pressure to meet the peak in regional heating demand and depend on coal for over half of electricity output.

IN A PINCH

The Philippines, Bangladesh, Vietnam and Malaysia stand out as the countries that may be most sensitive to the Indonesia coal disruption.

The most import-dependent buyer of Indonesian coal in 2025 was the Philippines, which secured 98% of its total coal imports from Indonesia, according to Kpler data.

Further, coal is by far the top source of electricity in the Philippines, and accounted for around 57% of utility electricity output last year, data from energy think tank Ember shows.

Bangladesh also secured more than 90% of its coal imports from Indonesia last year, and last year lifted coal's share of its electricity supply mix to record highs.

Malaysia and Vietnam secured more than half of their annual coal imports from Indonesia in 2025, and also rely on coal for 40% or more of their utility electricity supplies.

FARTHER AFIELD

The impact from any lengthy stoppage in Indonesian spot coal exports will be felt even in less import-reliant markets such as China and India, due to the configuration of coastal power plants.

Several major coal-fired power plants in China and India are located close to major bulk commodity import ports, and so source most of their coal from international suppliers rather than from the domestic market.

In the event of a sustained rally in international coal markets, those power plants can source more coal from the domestic market but will incur higher transit costs as trucks and rail systems replace bulk vessel deliveries.

That means that even though utilities in the Philippines and Bangladesh may be the first to respond to Indonesia's export halt, all coal plants in Asia will likely be impacted as markets price in volume cuts from the world's top supplier.

The opinions expressed here are those of the author, a columnist for Reuters.

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https://www.reuters.com/markets/commodities/asias-power-mix-be-shaken-up-by-indonesias-coal-export-stoppage-2026-02-04/