Not Wanting To Be Left Behind From Other Countries, Erick Thohir Will Be Serious About Coal Downstreaming

Minister of SOEs, Erick Thohir. (Photo: Doc. Ministry of SOEs)

JAKARTA - Present and accompanying President Jokowi during the groundbreaking of the coal gasification project in Muara Enim Regency, South Sumatra, SOE Minister Erick Thohir is committed to accelerating the downstream coal project into dimethyl ether (DME).

Erick is also committed to continuing to encourage SOEs to increase downstreaming. Erick does not want the abundance of natural resources (SDA) to become the material for the growth of other countries.

"BUMN fully supports the direction of President Joko Widodo (Jokowi) who continues to encourage new coal gasification in order to reduce dependence on imports of Liquid Petroleum Gas (LPG) and strengthen Indonesia's green energy," Erick said in a statement quoted on Monday, January 24.

Erick said other Southeast Asian countries have exported goods that have higher added value than Indonesia, which still relies on exports of raw materials.

"This is different from exports from Singapore, Malaysia, Thailand and the Philippines, which are dominated by finished and semi-finished goods," he added.

Erick said the coal gasification project carried out by PT Pertamina (Persero), PT Bukit Asam Tbk (PTBA), and Air Products & Chemicals Inc (APCI) could reduce LPG subsidies by IDR 7 trillion per year and improve Indonesia's trade balance.

"Downstreaming of natural resources by gasification of coal into DME gas to reduce LPG imports is part of the transformation of SOEs to be ready to face the global market," said Erick.

Erick conveyed that the national strategic project (PSN) for 20 years brought foreign investment from APCI amounting to US$2.1 billion or equivalent to Rp30 trillion. With the utilization of 6 million tons of coal per year, Erick assessed, this project can produce 1.4 million DME per year to reduce LPG imports by 1 million tons per year.

Not only from investment, Erick assessed that the new coal gasification PSN also provides a multiplier effect in the form of attracting other foreign investments, empowering national industries through the use of the TKDN portion, as well as absorbing local workers.

According to Erick, the coal gasification cooperation can save foreign exchange reserves of up to IDR 9.7 trillion per year and absorb 10,000 workers.

"Coal gasification provides direct added value to the national economy on a macro basis because it is in line with the president's directive to reduce dependence on imported products, as well as the transformation to a green economy and new and renewable energy," concluded Erick.