Why Coal Is Harder to Get This Season: El Niño and Four Other Problems

01Many problems at once

The coal industry is facing several problems at the same time, and together they have made coal harder to get and slower to move. El Niño is the most visible: it has dried up the rivers that carry Indonesia's coal to the sea. But it is only one of them.

Indonesia has also been limiting how much coal its miners can produce. China is mining less after deadly accidents. India's power plants are running short and buying more from abroad. And the conflict around the Strait of Hormuz has pushed up oil, shipping costs and the dollar.

Nepal's roughly 1,200 brick kilns are expected to start firing from 15 January, as they did this year under the agreement between the industry, the government and environmental agencies (Kathmandu Post). Most of the coal for that season is bought between now and December — exactly while these problems are at their peak. This article walks through each one, what it means for kilns in Nepal, and what to watch.

Market information in this article is current as of 30 September 2026. Coal markets move quickly, so check the latest position before making buying decisions.

02Problem 1: El Niño has dried up Indonesia's coal rivers

El Niño is a warming of the Pacific Ocean that shifts rainfall around the world. For Indonesia it usually means a longer, drier dry season. This year's event is exceptional: the US weather agency NOAA puts the chance of a very strong El Niño through the 2026–27 northern winter at over 90% (NOAA CPC), and forecasters at Columbia University's IRI expect El Niño conditions to last into spring 2027 (IRI).

Indonesian coal travels to the sea by river. Most coal from Kalimantan is loaded onto barges and floated down rivers such as the Barito and Mahakam to export terminals. When those rivers run low, barges can't carry full loads, and some stretches can't be used at all.

That is exactly what is happening now:

• The Barito River has dropped from 8–18 metres deep to just 3–4 metres, forcing barges to cut their loads by about half, and several miners have declared force majeure on shipments (The Jakarta Post via Asia News Network).
• On the Mahakam, barge loads have been capped at 5,500–6,000 tonnes, down from the usual 7,000 (same source).
• Indonesia's seaborne coal exports in August were about 36 million tonnes — 23% lower than a year earlier, the lowest August in five years and the third monthly decline in a row (same source).

The mines themselves are working; dry weather actually helps digging. The problem is moving the coal out.

Relief will come later than usual. Indonesia's weather agency BMKG expects the rainy season to start late across about 61% of the country, with most of Kalimantan starting in November and rainfall peaking in December, and the season to be shorter than normal in about half the country (BMKG). When the rains arrive, rivers should recover and delayed cargoes may be released together — but heavy rain at the peak, from December to February, can also flood mines, the opposite problem.

03Problem 2: Indonesia has been limiting how much coal it mines

Production quotas were cut, then loosened. Every Indonesian miner needs an approved yearly production plan, called the RKAB. For 2026 the government first set out to cut national output to about 600 million tonnes, from roughly 790 million tonnes in 2025, to support prices (Petromindo). In March, with prices rising, President Prabowo directed officials to allow more production — but that means each miner has to get a revised quota approved (Petromindo).

Slow approvals can stop shipments. In mid-September, Bayan Resources, one of Indonesia's largest miners, declared force majeure on supplies because its quota revision had not yet been approved. The government granted three of its subsidiaries an extra 15–20 million tonnes on 23 September, and Bayan lifted the force majeure the next day (The Jakarta Post, IDNFinancials). The episode shows how a delay in paperwork can stop coal as surely as a dry river.

04Problem 3: China is mining less

China, the world's biggest coal producer and importer, mined 7.7% less coal in August than a year earlier, and 3.3% less over the first eight months of 2026 (National Bureau of Statistics of China). The fall follows tighter safety checks after deadly accidents, including a May disaster in Shanxi that killed 82 miners — China's worst in 17 years (Business Recorder / Reuters).

When China mines less, it leans harder on imports — often from Indonesia, the same place Nepal's importers buy from.

05Problem 4: India's power plants are running short

Coal stocks at India's thermal power plants have fallen to about a week's supply, and 82 of the 190 plants tracked by the Central Electricity Authority had critically low stocks on 27 September (Business Standard). Indian power producers imported 85.6% more coal in August than a year earlier, and about 80% of it came from Indonesia (Business Standard / Reuters).

That puts India's power sector in direct competition with every other buyer of Indonesian coal, and gives it priority for India's own coal. We cover this in detail in India's Coal Market in 2026: What It Means for Nepal.

06Problem 5: Hormuz, oil, shipping and the rupee

The conflict around the Strait of Hormuz, which began at the end of February, has kept oil and ship fuel prices high, and marine fuel costs remain elevated (FreightWaves). That feeds into the cost of every coal voyage.

Higher oil has also weakened the Indian rupee, which slipped past 96 to the US dollar in late September, its weakest in about two months (NewsDrum). Because the Nepali rupee is pegged to the Indian rupee, imported coal costs Nepal more in rupees.

07And a change in who buys US coal

Following the US–China summit on 24 September, China agreed to import at least 10 million tonnes of US coal in each of 2027 and 2028 (Business Standard / Bloomberg). It won't change much this season, but it gives US sellers another large buyer, so US coal is unlikely to become easier to secure.

08What it means for Nepal's kilns this season

• Don't count on a cheap window. Weather, quotas, China's mining slowdown, India's power crunch and a weak rupee are all pushing the same way. Waiting for the market to fall is a bigger gamble than usual.
• Expect delays on Indonesian cargoes. Low rivers and quota approvals can both hold up loading. Build extra time into your plans and make sure your contract covers what happens if shipment is delayed or the supplier declares force majeure.
• Plan around the festivals. Dashain, Tihar and Chhath slow the border and trucking every year. Coal that reaches the port late could meet delays abroad and at home.
• Quality matters more in a tight market. When supply is short, sellers may offer whatever they can load. Judge every offer on its full test report, not on calorific value alone — see How to Read a Coal Test Report.
• Stay flexible. Secure the coal you are sure to need, but avoid locking in your entire season at once. If the rains return strongly and quotas are approved, the market can ease.

09What to watch in the coming months

10The bottom line

El Niño is the headline, but it is not the whole story. Weather, Indonesian quota policy, China's mine safety drive, India's power shortage and the Hormuz conflict are all tightening coal supply at once. Some of these problems should ease as the rains arrive and quotas are approved, but not all at once. Kiln owners who plan early, allow for delays and judge coal on its full quality will be in the best position when firing starts in January.