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COAL - JAKARTA. The downstream of coal in Indonesia is hindered by the lack of capable technology to execute this program.
The Special Staff of the Minister of Energy and Mineral Resources for the Acceleration of Mineral and Coal Governance, Irwandy Arif, stated that Indonesia does not master the technology for the downstream program.
"This value-added enhancement is still heavy when talking about value-added, so the entire value-added process in Indonesia, there is a big weakness, we don't have the technology, we pay (for technology) too expensive," said Irwandy in Jakarta, Thursday (17/3).
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Irwandy gave an example of domestic coal companies such as PT Kaltim Prima Coal and PT Bukit Asam Tbk (PTBA) which will carry out coal downstream but are hindered because the technology brought by the American company, Air Products, withdrew from the downstream project of both companies.
This technological limitation not only hinders coal downstream but also other mining commodities.
"Like the processing of added value of nickel whose entire technology is from abroad, for example, RKEF technology which is 90% from China, and HPAL for batteries also from China," said Irwandy.
He explained that eight coal downstream technologies are being developed, including coal gasification, coal liquefaction, coal briquettes, coke making, coal upgrading, coal extraction, blending facility, and the application of CCS and CCUS.
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Furthermore, most of these technologies are still in the feasibility study stage for the preparation of construction, a small part has entered the construction and technology application stage.
As known, coal downstream is mandated by Law (UU) Number 3 of 2020 concerning Minerals and Coal (Minerba). Its elaboration is clarified in its derivative regulation, namely Government Regulation (PP) Number 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities.
As explained by the Director of Coal Business Development Lana Saria in an event titled Public Discussion on the Economics of Coal Gasification INDEF on April 7, 2022, as many as 3 of the eleven projects have entered the production stage.
One of them is the project of entities of PT Bumi Resources Tbk group (BUMI), namely the coal to methanol project with a methanol production capacity of 1.8 million tons per year PT Kaltim Prima Coal which works with PT Kaltim Nusantara Coal, also the coal to methanol project of PT Arutmin Indonesia which is planned to have a production capacity of 2.95 million tons per year.
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Meanwhile, contacted separately, the Director and Corporate Secretary of PT Bumi Resources Tbk (BUMI) Dileep Srivastava said, the BUMI Group's downstream plan continues to be prepared with potential strategic partners from China.
"This year it is targeted to be able to carry out financial closing to be ready for the next stage or construction," Dileep told KONTAN, on Sunday (17/3).
He explained, in terms of economic calculations, this downstream project is sensitive to the selling price of the product and several government regulations, among others, Coal PNBP 0%, special coal price permits, tax holidays & several other incentives.
"BUMI's subsidiaries are always trying to carry out this coal downstream under the mandate of the regulations in force in Indonesia," he concluded.
