Jakarta,- The Ministry of Energy and Mineral Resources (ESDM) has confirmed that the coal downstreaming program will continue. ESDM Minister, Bahlil Lahadalia emphasized that coal downstreaming is a mandatory program for companies with Coal Mining Concession Work Agreements (PKP2B).
“Downstreaming is mandatory, but the final product doesn’t necessarily have to be dimethyl ether,” Bahlil said at his office on Monday (4/11).
Dimethyl ether (DME) is one type of coal gasification downstream product, intended to replace liquefied petroleum gas (LPG), which is primarily used by MSMEs and households.
Upon the expiration of PKP2B contracts, the government has approved the extension of certain mining contracts to become Special Mining Business Permits (IUPK). Bahlil cited examples of PKP2B companies extended as IUPKs, such as Adaro Indonesia, Arutmin Indonesia, Kaltim Prima Coal, and Kideco Jaya Agung.
Although not obligatory, Bahlil confirmed that DME is among the downstream products the government will continue to promote. “The requirement for renewal is that they must engage in downstreaming,” he said.
PT Bukit Asam (PTBA) had previously planned to pursue a DME project. However, the project has yet to materialize due to the withdrawal of its American partner last year. PTBA has indicated it is still searching for a new partner for its coal-to-DME downstreaming project.
“We are currently in discussions with several potential strategic partners for this development,” said PTBA's SVP of Project Management Office, Setiadi, during Pubex 2024, held online on Tuesday (27/8).
Setiadi mentioned that in selecting new partners, PTBA considers factors such as funding access, technology feasibility, and market reach.
“The goal is to secure a partner who can precisely target and effectively develop the coal-to-DME project according to the pricing benchmarks expected by the government,” he added.
Approval of Five Downstreaming Projects
The ESDM Ministry previously approved downstreaming programs for five first-generation coal companies with expired IUPK licenses.
The companies are PT Multi Harapan Utama, PT Adaro Indonesia, PT Kaltim Prima Coal, PT Arutmin Indonesia, and PT Kideco Jaya Agung. “There is also PT Kendilo Coal Indonesia, but they are currently facing issues and a case,” said Lana Saria, Expert Staff for Natural Resource Economics at the Ministry of Energy and Mineral Resources, during the Power Talk Energy Series event in Jakarta, on Thursday (13/6).
Here are the details of the approved coal downstreaming programs from these five companies:
- PT Kaltim Prima Coal (2025): Coal gasification to methanol, with conversion to ammonia possible; methanol production capacity of 1.8 million tons per year.
- PT Arutmin Indonesia (2026): Coal gasification to methanol, with conversion to ammonia possible; methanol production capacity of 2.95 million tons per year.
- PT Adaro Indonesia (2026): Coal-to-DME; methanol production capacity of 2 million tons per year and DME production of 1.34 million tons per year.
- PT Multi Harapan Utama (2027): Coal-to-semi-coke; semi-coke production capacity of 500,000 tons per year.
- PT Kideco Jaya Agung (2029 & 2031): Coal gasification; ammonia production capacity of 100,000 tons per year and urea production of 172,000 tons per year.
Sources : www.djakarta-miningclub.com Nov 06.24