BKPM Reveals Why Coal Downstreaming Is Stuck in Place

The Ministry of Investment and Downstreaming/Investment Coordinating Board (BKPM) has acknowledged that the value addition from coal downstreaming is not as significant as that of other commodities, such as nickel and bauxite. The Director of Mineral and Coal Downstreaming at the Ministry of Investment and Downstreaming/BKPM, Rizwan Aryadi Ramadhan, stated that this economic characteristic is one of the reasons for the slow progress of coal downstreaming projects. “If you look at the value addition, it is indeed not as large as other mineral commodities like nickel or bauxite,” Rizwan told reporters in Jakarta on Wednesday (29/7). On the other hand, companies must make substantial investments to build coal downstreaming projects. For instance, PT Bumi Etam Chemical (BEC) spent USD 2.3 billion to convert ‘black gold’ into methanol. “So the value addition is not even ten times that of the raw coal. With an investment value like BEC’s USD 2.3 billion, but the value addition is not that large, the effort seems too great compared to the potential profit,” he explained. Furthermore, finding the right technology remains a challenge in successfully implementing the coal downstreaming agenda. The government is still exploring the most efficient technology to execute the coal downstreaming roadmap that has been prepared. “The technology exists, but we have already drawn up a roadmap. Perhaps we haven’t yet found a technology that is more efficient, cheaper, and where the demand is already secured so that the economies of scale can be met,” Rizwan said. “There is indeed some investment interest from other countries coming in, but it is still limited to interest,” he added. “For other projects, as previously announced by Danantara, there is also the DME project, though not methanol, and we will try to oversee that. The hope is that it can provide a picture that the coal downstreaming industry has better commercial value than before,” he concluded.