In an effort to enhance the value of its coal industry, Indonesia has extended an invitation to China to collaborate on coal downstreaming and value-added development projects. These projects include coal upgrading, coal briquetting, coke production, and coal liquefaction. The offer was made by Acting Director General of Mineral and Coal, Bambang Suswantono, during the 7th Indonesia-China Energy Forum (ICEF) held in South Kuta, Bali, on September 3rd, 2024.
This initiative is part of Indonesia’s commitment to reducing greenhouse gas emissions as outlined in the Paris Agreement, which the country ratified through Law No. 16 of 2016. One of Indonesia’s concrete steps to meet this goal involves gradually decreasing coal consumption while transforming it into other forms, especially as gas, to support domestic needs such as liquefied petroleum gas (LPG) and chemical industries, including fertilizers.
“One of our policies in coal management is to reduce coal consumption while phasing out coal-fired power plants and developing coal into other forms, particularly gas, to fulfill LPG and chemical industry needs,” said Bambang.
To accelerate the coal downstreaming and value-added program, Indonesia is offering investment opportunities to various stakeholders. “We are inviting investments in coal downstreaming projects in Indonesia, including methanol and DME production, among others,” Bambang added.
Bambang emphasized that coal can be processed into various derivative products, serving both as industrial raw materials and energy sources. Six key products that can currently be developed from coal include coal upgrading, coal briquettes, coke, liquid coal, and coal gasification, including underground coal gasification.
To support the fast-tracking of these projects, the government is offering three incentives and requiring that the extension of Coal Mining Exploitation Work Agreements (PKP2B) be transformed into Special Mining Business Permits (IUPK). Additionally, companies must submit development and utilization plans for coal resources.
“Currently, six IUPK holders have planned to develop coal into gas, fertilizer, and coke. They are conducting economic and feasibility studies, and we hope to begin commissioning by 2030,” Bambang stated.
Indonesia’s coal resources stand at 97.29 billion tons, with reserves totaling 31.71 billion tons. Of these, 70% consists of low-quality coal, while the remaining 30% is medium- to high-quality coal.
The majority of these coal resources and reserves are concentrated in East Kalimantan, South Sumatra, South Kalimantan, Central Kalimantan, and Jambi. The rest are scattered across Jambi, Riau, North Kalimantan, Aceh, Bengkulu, West Sumatra, Papua, West Sulawesi, and parts of western Java.
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