Introductory Remarks of President of the Republic of Indonesia at the Limited Cabinet Meeting (through Video Conference) on the Acceleration of Increasing the Added Value of Coal Friday, 23 October 2020 at the Bogor Presidential Palace, West Java Province

Bismillahirrahmanirrahim,

Assalamu’alaikum warahmatullahi wabarakatuh,

Good morning,

May peace be upon us all.

Distinguished Vice President,

Distinguished Ministers.

This morning we will discuss the acceleration of measures to increase added value of coal. First of all, I would like to remind you that we must shift from becoming a raw materials exporter country–and coal is one of it—to becoming an industrial country capable of processing raw materials into finished or semi-finished goods. I suppose this is a big strategy that we must be consistent in implementing.

Therefore, we must step up the development of coal derivative industries, starting from upgrading industries, coal briquettes-maker, coke coal-maker, coal liquefaction, coal gasification, to water-coal mixture industries. I am confident that by developing these derivative industries, we will be able to increase the added value of the commodities many times over, cut imports of raw materials needed by several domestic industries such as steel and petrochemical industries, and last but not least provide large scale employment.

Thus, I urge you to accelerate the optimization domestic coal roadmap based on environmentally friendly technology. We must determine the strategies and the target through which downstream products will be developed so that the direction is clear for us as for how much coal will be converted into gas or petrochemical products. Also, do perform area mapping to determine areas to be developed into coal downstreaming industries so that our big strategies becomes clear in the future. Also ensure that selected areas have sufficient reserves of coal resources to guarantee the supply of coal needs in this downstream process.

There are several priorities that can be done, such as the coal gasification program (DME/dimethyl ether), coal gasification into syngas in which the product is needed by the petrochemical industries, as well as dimethyl ether (DME) which is very important as a substitute for LPG. We are also aware that most of our LPG is imported. We hope it can reduce our imports.

Second, I have received reports that the development of coal derivative industries is still constrained by economic matters, as well as by technological factors. I think the problem can be resolved if companies or SOEs are looking for partners. And we know that in 2019 only five IUPK OP (Special Mining Business License for Production Operations) holders carried out coal upgrading and two IUPK OP holders produced coal briquettes.

I want you to find solutions to overcome the sluggish development of coal derivative industries since we have been exporting the raw coal for a long time. Hence, I think it must end immediately if there will be some extensions with the obligation to start this.

That concludes my introductory remarks.

Translated by Galuh Wicaksono
Reviewed by M. Ersan Pamungkas