Prepare the spice paste: In a food processor or mortar, combine shallots, garlic, red chilies, ginger, galangal, the white part of one lemongrass stalk, candlenuts, turmeric, coriander powder, cumin powder, nutmeg powder, and salt with a splash of cooking oil. Process until a smooth paste is formed.
Sear the beef: Heat the remaining cooking oil in a large heavy-bottomed pot or Dutch oven over medium-high heat. Sear the beef cubes in batches until browned on all sides. Remove the beef and set aside.
Sauté the paste and aromatics: In the same pot, add a little more oil if needed. Add the spice paste and sauté over medium heat for 5-7 minutes until fragrant and the oil separates. Add the bruised lemongrass stalk, kaffir lime leaves, turmeric leaf (if using), and bay leaves. Sauté for another minute.
Combine and simmer: Return the seared beef to the pot. Pour in the coconut milk, add tamarind paste and palm sugar. Stir well to combine. Bring to a boil, then reduce the heat to low. The liquid should just be gently simmering.
Slow cook: Continue to simmer, uncovered, for about 2-3 hours, stirring occasionally to prevent the bottom from sticking. The liquid will gradually reduce, and the sauce will thicken. The beef should become very tender.
Reduce and caramelize: Once most of the liquid has evaporated and the sauce is thick, increase the heat slightly to medium-low. Stir more frequently, scraping the bottom of the pot, until the sauce is very thick, almost dry, and the oil has separated. The beef will start to caramelize and turn a rich, dark brown color. This step can take another 30-60 minutes. Taste and adjust seasoning if needed.
Serve hot with steamed rice.
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