Coal business remains prospective

Jakarta (ANTARA News) – Coal business happened to be sluggish in the 2012-2015 period because coal prices in the world market fell sharply, but it has begun to crawl up since early 2017.

Though prices of coal fluctuate, yet businesses still see good prospect in coal business. PT Indika Energy, for example, is of the view that coal remains prospective and the companys mainstay.

“We have subsidiaries engaged in various fields such as oil and gas, power plants, and coal,” PT Indika Energys Managing Director & CEO Azis Armand told reporters in Jakarta recently.

One of the companys subsidiaries managing coal is Kideco, located in Paser, East Kalimantan. The concession area is 50,921 hectares. It remains optimistic with the coal business.

To date, domestic market Obligation (DMO) has reached 25 percent of total production, with an average production of 2.5 to 2.6 million tons per month with a production target of 34 million tons at the end of the year.

After all, coal is still a potential mining resource needed to develop energy, generate electricity, and produce energy mix. The Ministry of Energy and Mineral Resources (ESDM) is still optimizing the use of coal in the national energy mix.

“We admit coal is a fast step in providing primary energy. The government does not remain silent about what is there,” Deputy Minister of ESDM Arcandra Tahar noted in a written statement received by ANTARA in Jakarta on Sunday (Nov 4).

He added that that currently he continues to make various strategic efforts so that the composition of the generator energy mix remains optimal. This is in line with the governments mission to create a clean environment and achieve national economic growth targets.

“This is a challenge for this country (Indonesia) as a developing country and not as a developed country. We need to create a clean and sustainable environment and achieve economic growth targets,” the deputy minister remarked.

After all, prospect for developing coal in the downstream sector is also bright. Several state-owned mining companies cooperate in the coal downstream (downstreaming) sector.

State-owned aluminum firm PT Inalum had recently announced its plan to sign a coal downstream cooperation with US company Air Products, PT Evidence Aam, and state oil and gas firm PT Pertamina in New York.

“Next month, we will sign a cooperation agreement in New York between PT Bukit Asam, Pertamina, and Air Product on the development of coal downstream sector to produce synthetic natural gas to syngas (SNG) and dimethylether DME,” Inalum President Director Budi G Sadikin stated at a press conference in Bontang last month (Oct 28).

Cooperation on coal downstreaming to convert coal into SNG and DME has also been carried out between PT Bukit Asam, which will collaborate with state-owned gas and oil firm PT Pertamina, fertilizer company PT Pupuk Indonesia, and PT Chandra Asri Petrochemical. The cooperation is to convert coal into SNG, which is a material for further processing into DME fuel, urea as fertilizer, and polypropylene as plastic raw material.

In the meantime, PT Pertamina and PT Bukit Asam (PT BA) have officially established a strategic cooperation for the development of coal with a US-based Air Products and Chemicals Inc.

The signing of the cooperation will be conducted in Allentown, the United States, on Wednesday (Nov 11).

The agreement was signed by PTBA President Director, Arviyan Arifin; President Director of Pertamiona, Nicke Widyawati; and Chairman, President & CEO of Air Products, Seifi Ghasemi, in the presence of Indonesian State-owned Enterprises (SOE) Rini Soemarno.

Soemarno stated that the acceleration of the development of the downstream mining (downstreaming) was a concrete step taken by the government to support the creation of added values in the mining sector while, at the same, supporting the efforts to economize the states foreign exchange.

The development of downstream mining will also bring a great impact to Indonesia, especially in the anticipation of the current account deficit.

“I would like to thank Pertamina and Bukit Asam for their active participation in the development of coal in the downstream area. Indonesia should continue to develop the downstream coal mining industrial sector in order to reduce imports and increase exports,” Soemarno noted.

The cooperation includes coal gasification development in the Peranap Coal Mining of Riau Province to produce coal into DME and SNG.

Widyawati stressed that Pertaminas cooperation with Bukit Asam and Air Products was a strategic step for all parties to improve national energy security, independence, and sovereignty through the use of DME and SNG.

“About 70 percent of LPG is still imported. In 2017, Indonesia consumed no less than 7 million tons of LPG. This coal gasification plant is a very strategic project nationally,” Widyawati explained.

In addition to realizing SOE synergy, cooperation with PTBA was carried out to optimize the utilization of national natural resources, Widyawati added.

On the same occasion, PTBA President Director Arviyan Arifin revealed that PTBAs downstreaming was strengthened by coal resources of 8.3 billion tons and coal reserves of 3.3 billion tons.

The gasificiation plant in Peranap is expected to start operating in 2022. The plant will be established with a capacity of 400 thousand tons of DME per year and 50 mmscfd of SNG.

Ghasemi stressed that his party, as the owner of industrial gas technology such as syngas and DME, is committed to fully support the coal downstreaming program.

“We are serious about being an important part of the establishment of an industry with upstream technology to produce syngas, which can be processed through downstream technology for both coal and petrochemicals,” Ghasemi pointed out.

Source: ANTARA News