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The islands of Western Indonesia contain numerous basins of Tertiary age that include thick sequences of coal measures. The major areas where coals outcrop are in Sumatera and Kalimantan with smaller coalfields present in Sulawesi and Jawa. Some coals are also found in Irian Jaya but, to date, these have not proved commercially attractive. Coal mining in Indonesia dates back to 1849 when, according to Soehandojo (1989) production commenced from near Pengaron in Southeast Kalimantan, with about 300,000 tonnes being produced over a period of 36 years. The main centres developed after that at Ombilin in West Sumatera, (1892) and at Bukit Asam in South Sumatera (1919). Production reached over a million tonnes before decreasing during and after the second World War. After the major rise in oil prices in 1973, exploration commenced first in South Sumatera and then other areas including Kalimantan and the development of the coal industry was designated as a high priority aim in Government planning. Recent development has centred on increased production through modernisation and new mines at Ombilin, and then Bukit Asam together with private mines and mines operating under Contracts of Work (COW) in Kalimantan. Development of the COW mines in Kalimantan has been largely responsible for the major increases in coal production over the period from 1990 to 1994. Current production supplies domestic power generation systems, but more than 70% of coal currently produced is exported. It is expected that the percentage will fall in the coming decade although the total tonnage will increase. Major increases in domestic consumption for power generation and to a lesser extent for cement and small industry will cause a change in the relative patterns of use for Indonesian coals. The known economic coal deposits of Indonesia are all in the Tertiary sequences of Western Indonesia. It is possible that some of the Tertiary coals in Irian Jaya will eventually be mined but it unlikely that coals from older units will prove economic. The coal measures can be divided into an older sequence associated with the commencement of deposition in the Tertiary sedimentary basins, although the age of the older coals ranges from Eocene in Kalimantan to Oligocene in Sumatera. Above these coals a marine sequence was deposited and during a phase of regression within the Miocene a very widespread phase of coal measures deposition occurred. Most of the coals have been deposited within active tectonic regimes and in some sedimentary basins subsidence to great depth has resulted in the development of high rank coals. However, tectonic inversion is required to bring coals of high rank to the near surface layers where they can be mined. In most Indonesian coalfields, although inversion has occurred it has not been sufficient to expose the coals of high rank. Therefore most of the coalfields contain of coals of relatively low rank. Tertiary coals show very little type variation so that rank is a major control over coal quality. Higher rank coals are found in areas where uplift has occurred (Ombilin and the Samarinda fold belt) and locally where igneous intrusions have altered the coals (Bukit Asam, Bengkulu and Silantek). Generally the Eocene coals have a higher content of mineral matter than the Oligocene and Miocene coals. Some of the Miocene coals are unusually thick and have a very low ash yield. Most Indonesian coals that have been proposed for mining have a low sulphur content. High sulphur coals occur but most proposals for mining relate to low sulphur coals. The rank of most Indonesian coals is too low for coking. Many have a moderate to high moisture content and this restricts the extent to which they can be transported. The main use for most coals is for combustion and the majority of Indonesian coal is used in pulverised fuel fired (PF) boilers. A smaller but very important proportion is used in cement making, and lesser amounts for other industries. The low ash yield makes some of the coals suitable for direct injection into blast furnaces although the rank is below the optimum level for this purpose. The Tertiary low rank coals would form suitable feedstocks for conversion to synthetic natural gas and for the production of liquid products. However, the economic viability of such processes does not appear imminent. Reserves of coal are moderately large in relation to the land area of Indonesia and are concentrated in the islands of Sumatera and Kalimantan. It is difficult to relate reserves and resources categories to those in use elsewhere but probable resources are about 36 billion (36,000,000,000) tonnes. Addition to reserves from new exploration is highly likely. It is probable the some new reserves of higher rank coal will be found but these will probably be small. The majority of new reserves will probably be similar in rank or of lower rank than the coals currently being mined. In general, these reserves of lower rank coals will be more suited to domestic power generation than to export. Production in 1992 reached 24 million tonnes and 50 million tonnes in 199x. These production and resources figures would give resources to production ratios of 1500 years and 720 years respectively. Assuming that reserves growth occurs, the resources base appears to be sufficient to support further major increases in production over those already planned to the year 2000. A part of this expansion could be for export but the majority of new production will probably be more suitable for domestic use.