The Ministry of Energy and Mineral Resources (ESDM) has confirmed that coal downstreaming projects are still ongoing. Currently, six companies are conducting economic feasibility studies and assessments.
"For coal downstreaming, it's still in process," said Director of Coal Business Development at the Ministry of ESDM, Surya Herjuna, to Kontan on Tuesday (September 17, 2024).
Previously, the Indonesian government had proposed to China to develop and enhance the added value (PNT) of coal in other products, such as coal quality improvement (coal upgrading), coal briquetting, coke making, and coal liquefaction. This offer was made directly by the Acting Director General of Minerals and Coal, Bambang Suswantono, during The 7th Indonesia China Energy Forum (ICEF) earlier this September.
To support the acceleration of these programs, in addition to providing three incentives, the government also mandates that extensions of Coal Contract of Work (PKP2B) agreements to Special Mining Business Licenses (IUPK) require companies to submit plans for coal development and/or utilization.
"Currently, there are six IUPKs that have planned to develop coal into gas, fertilizer, and coke. At present, these are under economic feasibility assessments and studies, and hopefully, by 2030, we can start commissioning," said Bambang.
Several coal companies have confirmed that various preparations have been made to implement coal downstreaming projects.
Corporate Secretary of PT Bukit Asam Tbk (PTBA), Niko Chandra, stated that the company has been preparing to support coal downstreaming while ensuring national energy security.
"PTBA has allocated specific coal reserves for downstreaming projects to ensure that the coal demand for the downstream industry is met," Niko told Kontan on Tuesday (September 17).
Niko further explained that PTBA is open to cooperation to develop these coal downstreaming projects. Previously, PTBA planned to work on the Coal to Dimethyl Ether (DME) project with Air Products and Chemicals Inc. However, the U.S.-based company withdrew from the project, which had an investment value of USD 2.1 billion.
Most recently, PTBA collaborated with the National Research and Innovation Agency (BRIN) to initiate a pilot project converting coal into Artificial Graphite and Anode Sheets as raw materials for Lithium-ion (Li-ion) batteries.
Artificial Graphite is the primary material for making anodes, while Anode Sheets serve as electrodes where oxidation reactions (positive poles) occur, a critical component of Li-ion batteries.
Meanwhile, Director and Corporate Secretary of BUMI, Dileep Srivastava, mentioned that the company plans to make an announcement regarding their coal downstreaming project by the end of this year.
"There is a possibility of an announcement (project update) by the end of this year," Dileep told Kontan on Tuesday (September 17).
Dileep confirmed that there have been no changes in the downstreaming plans for PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia.
For reference, in this coal downstreaming project, KPC will supply coal for the gasification project in Bengalon, with a requirement of around 5 million to 6.5 million tons per year of GAR 4,200 kcal per kg quality. Once operational, the plant will be able to produce 1.8 million tons of methanol per year.
Meanwhile, PT Arutmin Indonesia initially planned a coal to methanol downstreaming project with a production capacity of 2.95 million tons per year. Recently, it was reported that Arutmin has shifted its downstreaming project focus to coal to ammonia.
Head of Corporate Communication at Adaro Energy (ADRO), Febriati Nadira, revealed that Adaro is currently studying coal downstreaming plans.
"Adaro is still conducting studies to enhance the added value of coal," Ira explained to Kontan on Tuesday (September 17).
For context, Indonesia currently has coal resources of 97.29 billion tons and reserves of 31.71 billion tons, of which 70% of the resources consist of low-quality coal, and the remaining 30% are medium and high-quality coal.
Most of the resources and reserves are located in East Kalimantan, South Sumatra, South Kalimantan, Central Kalimantan, and Jambi. The rest are spread across Jambi, Riau, North Kalimantan, Aceh, Bengkulu, West Sumatra, Papua, West Sulawesi, and western Java.
