Barge Loads Cut as ITM Maintains Its 22.9 Million-Ton Coal Production Target
ICN News, Jakarta — PT Indo Tambangraya Megah Tbk (ITM) is facing a new operational challenge in the second half of 2026 as declining water levels on the Mahakam River put pressure on coal transportation activities.
The impact is particularly significant for operations connected to the Melak Cluster in West Kutai, East Kalimantan, where the Mahakam River plays an important role in moving coal from mining areas to the next stage of the supply chain.
However, despite the challenging conditions, ITM has maintained its 2026 coal production target at 22–22.9 million tons.
The company continues to operate in line with its approved mining plan while implementing mitigation measures to manage the impact of the low water level on coal transportation.
Mahakam Becomes a New Logistics Challenge
The decline in the Mahakam River’s water level has forced ITM to adjust its coal transportation strategy.
With the river becoming shallower, barges cannot always operate at their normal loading capacity. To reduce the risk of grounding and maintain safe operations, ITM has adjusted the amount of coal loaded onto barges.
Under normal conditions, a barge can carry around 7,000 tons of coal. With the current water conditions, loading capacity can be significantly reduced in certain operations.
This means that more barge trips may be required to transport the same amount of coal.
For a major coal producer, this can have a direct impact on logistics costs, transportation efficiency and shipment schedules.
The challenge is therefore not simply about producing coal. It is also about ensuring that coal can move efficiently from the mine to the market.
Production Target Remains at 22–22.9 Million Tons
Despite the transportation challenges, ITM has maintained its production target of 22–22.9 million tons for 2026.
During the first half of 2026, ITM produced approximately 9.9 million tons of coal, while coal sales reached around 12.3 million tons.
The company is targeting approximately 5.9 million tons of production in the third quarter of 2026 as part of its strategy to achieve the full-year production target.
This makes the second half of the year particularly important for ITM.
The company must not only maintain mining productivity but also ensure that coal can be transported from mining areas despite increasingly difficult river conditions.
Sales Target Reaches Up to 27.5 Million Tons
ITM is also targeting coal sales of approximately 26.9–27.5 million tons in 2026.
By the end of the first half, around 12.3 million tons had already been sold.
The company entered the second half of the year with a relatively strong sales position, with a significant portion of its coal sales already covered by fixed pricing or index-linked arrangements.
The challenge now is to maintain the balance between production, transportation capacity, logistics costs and customer demand.
Capital Expenditure to Support Operations
ITM has allocated approximately US$50 million in capital expenditure for 2026.
Around US$21 million had been spent by the end of the first half of the year, including investment related to port expansion.
Strengthening port and logistics infrastructure is strategically important as the company seeks to maintain reliable coal deliveries and support future production growth.
The investment also highlights that ITM’s strategy extends beyond the mine itself.
In the coal business, production capacity means little if transportation and logistics infrastructure cannot support the movement of coal to customers.
Financial Performance Remains Positive
Despite challenging market and operational conditions, ITM continued to record positive financial performance in the first half of 2026.
The company reported revenue of approximately US$1 billion, representing around 9% year-on-year growth.
Net profit reached approximately US$110 million, an increase of around 17% compared with the same period last year.
This performance provides ITM with a solid financial foundation as it enters the second half of 2026, when operational and logistics challenges could become increasingly important.
More Than Just a Production Challenge
The situation on the Mahakam River demonstrates that challenges in the coal industry do not always come from commodity prices or market demand.
Natural conditions and transportation infrastructure can be equally critical.
When river levels are normal, companies can maximize barge loading capacity and transportation efficiency.
But when water levels fall, companies must reduce loading volumes to maintain safety.
The result can be additional barge trips, longer transportation times, higher logistics costs and potential delays in coal shipments.
For ITM, the ability to respond quickly to these conditions will be an important part of maintaining operational performance throughout the remainder of 2026.
ITM’s Operational Resilience in Focus
ITM has implemented mitigation measures to deal with the declining Mahakam River water level while continuing to pursue its annual production and sales targets.
The company’s ability to manage production, transportation and logistics simultaneously will be critical in the coming months.
If river conditions improve, pressure on coal transportation could gradually ease. But if dry conditions continue for longer, logistics management will become an increasingly important factor in determining operational efficiency.
For ITM, the challenge in 2026 is not simply about producing more coal. It is about ensuring that coal can move from the mine to the market safely, efficiently and on schedule.
The Mahakam River is therefore more than just a transportation route. For ITM, every decline in water level can mean lower barge loads, additional trips, higher logistics costs and greater pressure on the coal supply chain.
And how ITM manages that challenge could become one of the key factors shaping its operational performance through the end of 2026.
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