Indonesian President Joko Widodo has ordered the acceleration of investment in coal downstream to dimethyl ether (DME) low calorie.
The announcement was made by the Minister of Investment/Head of the Investment Coordinating Board (BKPM), Bahlil Lahadalia, after a limited meeting with President Widodo to discuss coal downstream at the Presidential Palace Complex on Tuesday (March 7, 2023).
“Since earlier today, we have been holding a meeting with the President, specifically discussing the acceleration of investment downstream in the context of DME low calorie as a substitute for LPG imports,” said Bahlil.
“President Widodo instructed us to accelerate the downstream of coal into DME, which is part of optimizing low-calorie coal for our DME replacement,” he added.
Currently, Indonesia imports around 6-7 million tons of LPG per year, and the government aims to gradually reduce this import.
Furthermore, Bahlil revealed that the meeting with the President on Tuesday also discussed the development of coal downstream conditions at PT Bukit Asam in South Sumatra. Previously, the coal downstream process at the mining company had been inaugurated by President Widodo, but it had been halted temporarily.
Meanwhile, the Ministry of Energy and Mineral Resources (ESDM) has officially revised the guideline for setting benchmark prices for coal sales.
Under the new rules, there are three benchmark coal price formulas.
The new rules are laid out in Ministerial Decree No.
41.K/MB.01/MEM.B/2023. The first formula is for the Reference Coal Price (in the equivalence of calorific value of 6,322 kcal/kg GAR, Total Moisture 12.58%, total sulfur 0.71%, and Ash 7.58%). Its formula is HBA = (0.7Pm) + (0.3Pm-1) (US$/ton).
Pm is the average selling price of coal with a calorific value of 6,200 -6,400 kcal/kg GAR in the previous month (US$/ton).
Pm-1 is the average selling price of coal with a calorific value of 6,200 -6,400 kcal/kg GAR two months before (US$/ton).
The second formula is for the Reference Coal Price (in the equivalence of calorific value of 5,200 kcal/kg GAR, Total Moisture 23.12%, total sulfur 0.69%, and Ash 6%). Its formula is HBA I = (0.7Pm) + (0.3Pm-1) (US$/ton).
Pm is the average selling price of coal with a calorific value of 5,100 -5,300 kcal/kg GAR in the previous month (US$/ton).
Pm-1 is the average selling price of coal with a calorific value of 5,100 -5,300 kcal/kg GAR two months before (US$/ton).
The third formula is for the Reference Coal Price II (in the equivalence of calorific value of 4,200 kcal/kg GAR, Total Moisture 35.29%, total sulfur 0.2%, and Ash 4.21%). Its formula is HBA II = (0.7Pm) + (0.3Pm-1) (US$/ton).
Pm is the average selling price of coal with a calorific value of 4,100 -4,300 kcal/kg GAR in the previous month (US$/ton).
Pm-1 is the average selling price of coal with a calorific value of 4,100 -4,300 kcal/kg GAR two months before
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