Potential Coal Gasification Investors Still Calculating Project Economic Viability

The Deputy Minister of Investment and Downstreaming/Deputy Head of the Investment Coordinating Board (BKPM), Todotua Pasaribu, revealed that plans for coal gasification projects into Dimethyl Ether (DME) are still ongoing.

He emphasised that the project must be executed with profound calculations. Consequently, he understands that potential investors are still conducting detailed assessments of the project’s feasibility and economic viability.

“It is perhaps still in the stage of assessing what the feasibility looks like,” Todotua told reporters during the ‘Sarasehan 100 Ekonom Indonesia’ event in Jakarta on Thursday (3/9).

“DME is not a stand-alone product; the downstream absorption industries and other related factors must also be calculated, so the process is still ongoing,” he explained.

Referring to international standards, Todotua noted that China remains the most appropriate benchmark for such gasification projects.

The Ministry of Investment and Downstreaming/BKPM previously acknowledged that the added value of coal downstreaming is not as significant as other commodities such as nickel and bauxite.

Rizwan Aryadi Ramdhan, Director of Mineral and Coal Downstreaming at the Ministry of Investment and Downstreaming/BKPM, stated that these economic characteristics are one of the reasons for the slow progress of coal downstreaming projects.

“The added value is not more than ten times that of the coal itself. Therefore, with an investment value such as that of PT Bumi Etam Chemical (BEC) at US$2.3 billion, the added value is not particularly large; it seems the effort is too great compared to the potential profit,” he remarked.