The Indonesian government is actively promoting downstream activities and accelerating the value addition of coal mining products. One significant effort in this direction involves the gasification of coal into dimethyl ether (DME) as an alternative to imported liquefied petroleum gas (LPG), which has seen increasing imports over the years. In 2020, LPG imports constituted 77.63% of the national requirement, totaling 8.81 million tons. Without coal gasification efforts, the import ratio could rise to 83.55% of the total demand of 11.98 million tons by 2024. PT Bukit Asam, a state-owned mining company, initiated a pioneering coal gasification to DME project in Tanjung Enim, South Sumatra, marking a crucial step in realizing this initiative. The project involves three main parties: PT Bukit Asam as the coal supplier, U.S.-based Air Products as the gasification technology provider, and PT Pertamina as the DME off-taker. The project is expected to take up to 30 months from groundbreaking in 2022 to completion.
Additionally, the construction of a coal-fired steam power plant (PLTU) at the mouth of the coal mines in Muara Enim, South Sumatra, contributes to downstream activities and value addition of coal. Historically, coal produced by PT Bukit Asam in South Sumatra was transported to other regions, primarily in East Java, to support national energy supply, leading to minimal local value addition. With the establishment of the PLTU near the mining site, a portion of Muara Enim's coal can be used for electricity generation, creating additional value. This strategic project, PT PLTU Mulut Tambang Sumsel-8, with a capacity of 2x620 MW, is valued at USD 1.68 billion and is part of the 35,000 Megawatt (MW) project. It is being developed by PT Huadian Bukit Asam Power, an independent power producer (IPP), and requires 5.4 million tons of coal per year. PT Bukit Asam is leveraging the vast coal reserves in Tanjung Enim, which amount to 3 billion tons, to support these endeavors. In South Sumatra alone, with its contribution of around 43 billion tons of the national coal resource of 149.01 billion tons, there is substantial potential for coal production growth. The province's coal production is primarily centered in Muara Enim and Lahat, with an annual output exceeding 25 million tons due to supportive infrastructure like rail transport and specialized road networks for coal transport to stockpiles and onward shipment.
