A number of coal companies confirmed their commitment to continuing the planned coal downstream projects.

PT Bukit Asam Tbk ( PTBA ) Corporate Secretary Apollonius Andwie revealed, his party is committed to encouraging coal downstream in line with government policy.

Various preparations are currently being carried out by PTBA, including obtaining a coal-based Industrial Estate permit or Bukit Asam Coal Based Industrial Estate in Tanjung Enim with an area of ​​585 Ha to securing coal supply for the project which is expected to start production in the second quarter of 2025.

"The company has provided land for the development of the downstream industry in collaboration with potential partners," Apollonius told Kontan, Monday (19/6).

Apollonius continued, his party was optimistic that the project could be implemented. In addition, PTBA proposed that the Tanjung Enim Industrial Zone be designated as a Special Economic Zone (SEZ).

With this, there is an opportunity to get incentives for investors who contribute to the development of coal downstream.

However, Apollo did not elaborate on potential replacement partners for the company from the United States, Air Products, which has declared its withdrawal from the project with a capacity of 1.4 million tons of dimethyl ether (DME).

"We are open to working with competent partners in the field of coal downstream to jointly develop the downstream industry," added Apollo.

Meanwhile, PT Bumi Resources Tbk ( BUMI ) has also not changed plans for the two downstream projects by its subsidiaries, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia.

"There has been no change in the target from what was previously stated. We hope to achieve the target for commissioning ," said Dileep to Kontan, Sunday (18/6).

Dileep explained, his party is still trying to complete the project in accordance with the time limit allowed in the existing work plan.

Meanwhile, regarding Air Products' replacement partner in the coal to methanol processing project with KPC, Dileep confirmed that the negotiation process is still ongoing.

"Announcement will be made in the next quarter after all arrangements with all parties involved have been in place including the construction schedule," said Dileep.

In the coal downstream project, KPC is prepared to collaborate with Ithaca Group and Air Products. KPC will act as a supplier of coal for the gasification facility.

The need for coal that KPC must provide for the gasification project in Bengalon is around 5 million tons-6.5 million tons per year with GAR quality of 4,200 kcal per kg. When operational, the plant can produce 1.8 million tons of methanol per year.

Meanwhile, another BUMI subsidiary, PT Arutmin Indonesia, is said to be working on a coal to methanol gasification project on Pulau Laut, South Kalimantan. The project is projected to be able to produce 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.

The commitment to continue the coal downstream project was also conveyed by PT Adaro Energy Indonesia Tbk ( ADRO ).  

Head of Corporate Communication of Adaro Energy Febriati Nadira said that her party is currently studying various alternatives and continues to conduct studies to increase the added value of coal.

"Adaro also continues to strive to develop and diversify its business outside the coal industry and is committed to transforming the business into a more sustainable company through long-term green initiatives to capture growth opportunities in a green economy," said Febriati.

However, Febriati did not detail the latest developments for Adaro Indonesia's coal downstream project.

Adaro Indonesia has plans for the Coal to Methanol/DME Project which is targeted to start production in 2026.

Acting Executive Director of the Indonesia Mining Association (IMA) Djoko Widajatno said that there are still a number of challenges that have caused coal downstream in Indonesia to not run optimally.

"The price of coal is very high and downstream, such as the DME project, requires infrastructure (for) distribution," said Djoko to Kontan, Monday (19/6).

Djoko added that coal downstream projects also require a sizable investment. However, development to the downstream for the coal sector is considered to have been carried out by a number of countries.

"Several countries that have become benchmarks for coal downstreaming are China, Japan, Germany and South Africa," concluded Djoko.

There are eleven coal downstream projects planned.

First , the coal to dimethyl ether (DME) project by PT Bukit Asam Tbk (PTBA) with a production capacity of 1.4 million tons per year. The project is expected to start production in the second quarter of 2025.

Second , the Coal to Methanol Project by PT Kaltim Prima Coal and PT Kaltim Nusantara Coal with a methanol production capacity of 1.8 million tonnes per year. This project is targeted for completion in the second quarter of 2025.

Third , the Coal to Methanol Project by PT Arutmin Indonesia with a product capacity of 2.95 million tons per year. The project is targeted to start production in 2026. Fourth , the Coal to Methanol Project by PT Kendilo Coal Indonesia with a product capacity of 300 thousand tons per year. The project is targeted to start production in 2029.

Fifth, the Semi Coking Project by PT Multi Harapan Utama with a production of 500 thousand tons per year. This project is planned to start production in 2027. Sixth, the Coal to Methanol/DME Project by PT Adaro Indonesia is targeted to start production in 2026.

Seventh, the Underground Coal Gasification (UCG) Project by PT Kideco Jaya Agung with an annual production capacity of 100 thousand tons of ammonia and 172 thousand tons of urea per year. This project is planned for production in 2027.

Finally, the Coal to Methanol/DME Project by PT Berau Coal with a semi-coke production capacity of 500 thousand tons per year. The project is targeted to start production in 2029

Image source: Nova Wahyudi

Source: https://industri.kontan.co.id/news/perusahaan-batubara-tegaskan-komitmen-lanjutkan-proyek-hilirisasi