This move, announced last week at a Bali coal conference, comes after the Indonesian government found that only about 6000 of the 10,100 newer coal permits known as IUPs were complying with regulations.

According to Reuters the government has also determined that about 40% of the 10,000-plus IUPs had problems such as “overlapping permits and unpaid royalties”

Said believes that the present market conditions provided the perfect time to consolidate the private coal scene in the nation.

However, Indonesian Coal Mining Association chairman Pandu Sjahrir told Platts that consolidation in the nation’s mining industry would eventually happened but “he could not say when”

Indonesia’s coal output fell 21% year-on-year to 97 million tonnes in the March quarter.

Last month Macquarie Wealth Management credited most global output cuts of the commodity this year to Indonesia’s small to medium sized exporters.

“One must remember that the majority of Indonesian mining costs are US dollar-denominated and hence their competitive position has deteriorated over the past nine months,” Macquarie said at the time.

“On top of that, when looking at ease of supply cutting globally, Indonesian producers are, notwithstanding the fact that many are highly indebted, probably top of the list because they aren’t as burdened by infrastructure and other labour-force related liabilities.”