The Indonesia Coal Mining Association forecasts its coal production this year to rise by about 310 million tons, up from the last month's forecast of 300 million tons.
Coal prices are likely to pick up to about $100 a ton by the end of 2010, reports Reuters.
The prices are expected to go up due to weather conditions and demand during winter.
Indonesia, the world's top thermal coal exporter, has experienced prolonged rains in the dry season, hitting coal output, reports Reuters.
Indonesia Coal Mining Association chairman Bob Kamandanu said Indonesia could also see increased demand for its coal due to congestion problems affecting shipments from Australia's Newcastle port.
"If Australia can't meet their supply contracts, there will be a shifting of demand to Indonesia," he said.
India will overtake Japan as the top buyer of coal from Indonesia, increasing its imports from 40 million tons in 2010 to 70 million tons in 2012.