PT Bumi Resources Tbk ( BUMI ) oversees the coal downstream agenda. BUMI hopes to start construction work on its subsidiary's coal downstream project this year. "We are currently evaluating the project and selecting options with a commissioning target of around 3 more years or more," said BUMI Director and Secretary, Dileep Srivastava to Kontan.co.id, Monday (6/2).

As is known, BUMI is overseeing the agenda of 2 coal to methanol gasification projects through its subsidiaries, one of which is carried out by PT Kaltim Prima Coal (KPC). According to the plan, KPC will work on the construction of a coal-to-methanol processing facility in Bengalon, East Kalimantan. In this project, BUMI as part of the Bakrie Group is collaborating with Ithaca Group and Air Products. Later, KPC will act as a supplier of coal for the gasification facility, the projected need is around 6.5 million tons. The input will then be processed into 1.8 million methanol per year.

Other projects are carried out by another subsidiary, namely PT Arutmin Indonesia. Just like KPC, Arutmin will also work on a coal to methanol gasification project on Pulau Laut, South Kalimantan. According to the plan, Arutmin will produce as much as 2.8 million tons of methanol per year by processing GAR quality coal input of 3,700 kcal per kg of 6 million tons per year. Dileep has not disclosed how much capital expenditure BUMI will budget to finance the two projects. "It's too early to talk about the numbers at this time," said Dileep.

Regarding incentives, Dileep believes that royalty incentives from the government make downstream projects attractive. As is well known, Article 128 A of Government Regulation in Lieu of Law (Perppu) Number 2 of 2022 concerning Job Creation states that IUP or IUPK holders at the stage of Production Operations who carry out the Development and/or Utilization of Coal can be given certain treatment towards obligatory state revenues as referred to in Article 128. The provision of certain treatment in question can be in the form of the imposition of a production fee/royalty of 0%.

Source: https://industri.kontan.co.id/news/bumi-resources-bumi-berharap-mulai-konstruksi-proyek-hilirisasi-batubara-di-2023