Indonesia Government Want Cheaper Coal for Gasification Commercialization Project

Indonesia plans to set cheaper prices for coal to be sold to future gasification facilities as part of incentives for investors, Energy and Mineral Resources Minister Arifin Tasrif told reporters.

The government is promoting the development of the coal gasification industry to take advantage of Indonesia’s large coal output and is offering incentives to attract investments.

Tasrif said the government will “direct” coal prices to $20 to $21 per tonne for future plants that will process coal into gas.

“If possible, we even want the price to be below $20 per tonne,” he said.

Indonesia’s government coal benchmark price is currently set at $65.93 per tonne.

He said the government is also planning to lower royalty charges for coal miners investing in gasification.

State coal miner PT Bukit Asam (PTBA) is currently planning to build a gasification plant in South Sumatra that is expected to start operation around 2023-2024. Air Products and Chemicals (APD) is also also very interested in investing about $6,5 billion to invest in PT Bukit Asam.

The country’s largest coal miner PT Bumi Resources (BUMI) is conducting a feasibility study on potentially investing over $1 billion in a gasification facility.

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