The CEO of Indonesia's PT Alumina Mining Indonesia revealed that the coal deep processing to methanol project jointly promoted by the company and PT East Kalimantan Raw Coal Company is scheduled to officially start construction at the end of 2026. The project uses coal gasification technology to produce methanol, with an annual design capacity of 2 million tons. The raw material is specifically low-quality coal with a calorific value of 3,400 kcal/kg, requiring approximately 7.7 million tons of coal annually. The total capital investment is as high as US$2.5 billion, equivalent to approximately IDR 43.54 trillion. According to the plan, the entire cycle of engineering design, equipment procurement, and construction will take three years from the start of construction, with commercial operation expected by the end of 2029. The company's head admitted that this heavy asset project is difficult to advance and urgently requires the Indonesian government to introduce multiple supportive policies to ensure its success.
The company hopes to enjoy preferential policies equivalent to those of special economic zones, including fiscal incentives such as tax holidays and duty-free imports of equipment. At the same time, it is applying for exemption from various non-tax revenues for coal used as methanol production raw materials, simplification of project approval procedures, and coordination with local banks to provide financing support for the project. Local financial institutions are generally cautious about fossil energy deep processing projects, and financing channels are relatively limited. In addition, the company also calls for the improvement of local methanol industry supporting regulations and the introduction of investment protection policies to hedge against operational risks arising from future policy changes. Downstream coal processing in Indonesia is a statutory mandatory requirement. According to relevant provisions of Indonesia's Mineral and Coal Law and Government Regulations, coal companies that hold mining business licenses and have transitioned from original mining contracts must implement coal deep processing investments. This is also a mandatory condition for these companies to apply for extension of business licenses.
Currently, a total of seven large coal companies in Indonesia are required to deploy coal deep processing industries. In addition to PT Alumina Mining Indonesia and PT East Kalimantan Raw Coal Company, they also include PT Adaro Energy, PT Kideco, PT Mutiara Harapan, PT Tani Toharuum, and PT Berau Coal. Each company has different directions. Among them, PT Mutiara Harapan and PT Tani Toharuum focus on coal processing to produce semi-coke, while PT Berau Coal is also planning a coal-to-methanol project. All coal companies are accelerating the extension of the coal industry chain under policy requirements, promoting the high value-added conversion of local low-quality coal.
行业快讯
Two Major Indonesian Coal Companies' Coal-to-Methanol Project to Start Construction by Year-End
The CEO of Indonesia's PT Alumina Mining Indonesia revealed that the coal deep processing to methanol project jointly promoted by the company and PT East Kalimantan Raw Coal Company is scheduled to officially start construction at the end of 2026. The project uses coal gasification technology to produce methanol, with an annual design capacity of 2 million tons. The raw material is specifically low-quality coal with a calorific value of 3,400 kcal/kg, requiring approximately 7.7 million tons of coal annually. The total capital investment is as high as US$2.5 billion, equivalent to approximately IDR 43.54 trillion. According to the plan, the entire cycle of engineering design, equipment procurement, and construction will take three years from the start of construction, with commercial operation expected by the end of 2029. The company's head admitted that this heavy asset project is difficult to advance and urgently requires the Indonesian government to introduce multiple supportive policies to ensure its success.
The company hopes to enjoy preferential policies equivalent to those of special economic zones, including fiscal incentives such as tax holidays and duty-free imports of equipment. At the same time, it is applying for exemption from various non-tax revenues for coal used as methanol production raw materials, simplification of project approval procedures, and coordination with local banks to provide financing support for the project. Local financial institutions are generally cautious about fossil energy deep processing projects, and financing channels are relatively limited. In addition, the company also calls for the improvement of local methanol industry supporting regulations and the introduction of investment protection policies to hedge against operational risks arising from future policy changes. Downstream coal processing in Indonesia is a statutory mandatory requirement. According to relevant provisions of Indonesia's Mineral and Coal Law and Government Regulations, coal companies that hold mining business licenses and have transitioned from original mining contracts must implement coal deep processing investments. This is also a mandatory condition for these companies to apply for extension of business licenses.
Currently, a total of seven large coal companies in Indonesia are required to deploy coal deep processing industries. In addition to PT Alumina Mining Indonesia and PT East Kalimantan Raw Coal Company, they also include PT Adaro Energy, PT Kideco, PT Mutiara Harapan, PT Tani Toharuum, and PT Berau Coal. Each company has different directions. Among them, PT Mutiara Harapan and PT Tani Toharuum focus on coal processing to produce semi-coke, while PT Berau Coal is also planning a coal-to-methanol project. All coal companies are accelerating the extension of the coal industry chain under policy requirements, promoting the high value-added conversion of local low-quality coal.
