Indonesian Political, Business & Finance News

BPPT produces cheap coke briquettes for small industries

| Source: JP

BPPT produces cheap coke briquettes for small industries

The Jakarta Post, Jakarta

The Agency for the Assessment and Application of Technology
(BPPT) has launched a pilot project to produce coke briquettes
from local coal amid the rising price of imported coke.

BPPT deputy chairman for the Development of Natural Resource
Technology Jana Tjahjana A. said the agency had developed the
technology to produce coke from local coal, which would
substitute imported coke from China, Taiwan and Japan.

"We have successfully tested this coke at several factories,
and soon will produce around 2 tons a day to show to investors
that investing in a coke factory could be profitable," said Jana.

He said many small- and medium-scale steel and iron factories
had to temporarily stop operations due to high energy costs
resulting from the rising price of coke; electricity or fuel oil
as an alternative energy source would be even more expensive than
imported coke.

"Many factories, for instance in Batur Ceper, West Java, have
had to halt production because of the price increase," he said.

Jana said over the past two years, the price of coke had
increased by almost 400 percent. Coke cost Rp 1,600 per kilogram
in January 2002, and by this February, the price had risen to Rp
6,000 per kilogram due to decreased supply from China.

BPPT's coke would be much cheaper than the imported material,
around Rp 3,000 per kilogram.

"There is no reason for small-scale factories not to use the
local coke, as it is cheaper and only a little lower in quality
than the imported one," said Jana.

He said the difference in quality was evident in the
materials' ability to burn scrap: One ton of imported coke could
burn 7 tons of steel, while the a ton of local coke could burn 5
tons of steel.

"We urge investors to build coke factories, because there will
be a huge demand. Investment capital for a single factory with an
annual capacity of 2 tons of coke is around Rp 300 million," he
said.

He predicted that the high price of imported coke would at
least continue until 2008.

Coke is residual fuel made from coal through destructive
distillation. The material is mainly used in small and medium
factories to burn and melt iron and raw steel to manufacture
finished iron and steel products, but it is also used in sugar,
glass, timber and other factories.

Indonesia is the world's largest producer of coal, but most of
the mined coal is non-coking coal, due to the its low carbon
composition.

Indonesia imports 92 percent of its domestic coke consumption
of 210,000 tons per year. Small- and medium-scale steel and iron
factories consume 90,000 tons of coke annually, and factories in
Batu Ceper alone consume 30 tons of coke daily.

Jana said the BPPT coke was made from West Sumatra's Ombilin
coal in a two-step process: Carbon is added to the coal at a
temperature of more than 1,000 degrees Celsius and then fused
with asphalt at high pressure, after which the coke is molded
into briquettes.

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