The Government Wants To Build A DME Project, IMA Calls The Economy Still A Stumbling Stone

Executive Director of the Indonesian Mining Association (IMA) Hendra Sinadia. (Photo: Maria Trisnawati/VOI)

JAKARTA - The government through the Task Force for the Acceleration of Downstreaming and National Energy Resilience has officially submitted the Pre-Study Feasibility document to the Anagata Nusantara Resources Investment Management Agency (Dantara Indonesia) as a concrete step to accelerate the national downstream agenda.

One of these projects is downstream coal to dimethyl ether (DME) 6 locations, with an estimated investment value of IDR 164 trillion.

Executive Director of the Indonesian Mining Association (IMA) Hendra Sinadia assessed the positive for the gasification project.

He hopes that, with the support of Danantara and the government, this long planned project can run.

However, Hendra highlighted the economic challenges that have long been the shadow of the DME project. According to him, as long as this gasification project brings profits, there will be many coal mining companies competing to run the DME project.

"The general language is economic. Yes, so the point is that in all business fields, as long as it's a quote, there's good money, people will definitely compete," Hendra told the media crew quoted on Thursday, July 24.

Previously, a state-owned coal issuer, PT Bukit Asam tbk (PTBA), had conducted a groundbreaking in 2022 by cooperating with a company from the US, Air Product but then left because it was deemed not to have met the economic value. For this reason, Hendra emphasized the importance of technology in carrying out this project.

"Technology is expensive, we don't have the technology, and in the world, maybe only China, which is already running it. Other coal producing countries such as India, Russia, Australia, they don't go there," he explained.

Furthermore, Hendra also said that DME is actually a new thing for mining business actors. This is also very different from the business that has been occupied so far that it cannot predict the price of DME and the projected profits that will be obtained later.

"If coal already knows how much it costs. But if for example gasification, we produce DME, we don't know how much DME costs and it's a long-term project. So we can be said to be blank, yes, we don't know how the market is," continued Hendra.

Hendra hopes that the project that has been implemented since the 7th President Ri Joko Widodo era will continue.

Moreover, he continued, the Danantara board of directors is an expert figure in the mining sector such as the Danantara Chief Investment Officer (CIO), Pandu, who was once the head of the coal association.

"It must have been mapped, especially since there are a lot of experts there, Mr. Pandu has also been the Chair of the Coal Association for example, so there is optimism if Danantara wants to support it," said Hendra.

Doc. Maria