Jakarta – Indonesia’s record-high coal production, which reached 836 million tonnes in 2024, masks deep economic vulnerabilities at the regional level. As global market dynamics begin to shift—marked by declining international coal prices and the efforts of major consumer countries such as China and India to strengthen their domestic energy independence—the conventional business model in Indonesia’s coal-producing regions is approaching a critical turning point.
In response to these emerging risks, Aryanto Nugroho, National Coordinator of Publish What You Pay (PWYP) Indonesia, spoke at a public discussion during Pesta Media 2026, held at Taman Ismail Marzuki, Jakarta, on Sunday (12 April 2026). Organized by the Alliance of Independent Journalists (AJI) Jakarta in collaboration with the Institute for Essential Services Reform (IESR), the discussion was held under the theme “Coal Dependency and the Challenges of Regional Economic Transformation.”
At the forum, attended by dozens of journalists and civil society representatives, PWYP Indonesia presented three key observations on the urgent need to diversify the economies of Indonesia’s extractive commodity-producing regions.
The Risk of Fiscal Lock-In in Indonesia’s Coal Heartlands
PWYP Indonesia highlighted that coal-rich provinces such as East Kalimantan, South Kalimantan, and South Sumatra are currently experiencing a condition of fiscal lock-in, characterized by an excessive dependence on the mining sector. In some of these regions, mining contributes as much as 50% of regional gross domestic product (GRDP).
“Today’s prosperity, driven by coal royalties, may create a fiscal illusion. As global demand slows and coal prices decline permanently, these regions face a serious risk of fiscal shock unless alternative economic buffers are developed well in advance,” Aryanto explained.
Economic Diversification Is Not the Sole Responsibility of Local Governments—Companies Must Also Transform Their Business Models
According to PWYP Indonesia, discussions on post-mining economic transformation have too often placed the burden solely on local governments. However, based on the organization’s latest research, coal companies themselves must become proactive actors in corporate business transformation.
Aryanto emphasized that mining companies should leverage their substantial capital, assets, infrastructure, and technical expertise to diversify and invest in low-carbon and sustainable sectors.
“Corporate business transformation is not merely about environmental sustainability—it is also a survival strategy for the companies themselves while helping to safeguard the economic stability of the regions in which they operate,” he added.
Ensuring a Just Transition for Workers: Reskilling and Responsible Use of Mine Closure Funds
PWYP Indonesia further emphasized that the energy transition is not simply about achieving targets and statistical indicators—it is fundamentally about people and workers whose livelihoods are affected. A just transition must prioritize reskilling programs to equip mine workers with the skills needed to transition into the green economy.
In addition, transparency and accountability in the management of reclamation guarantee funds and mine closure funds are essential. These resources should be managed strategically and transparently from the outset to finance infrastructure and long-term economic opportunities for local communities, rather than serving merely as administrative requirements that disappear once mining operations end.
Through the momentum of Pesta Media 2026, PWYP Indonesia called on journalists to strengthen their public watchdog role in monitoring commitments to the energy transition and regional economic transformation. Reducing dependence on coal is no longer simply an environmental choice—it has become a strategic economic necessity before global market forces impose the transition without adequate preparation. (AN)