Association Pushes for Coal Downstreaming Incentives Up to the Consumer Level

The Executive Director of the Indonesia Mining Association (“ IMA ”), Hendra Sinadia, stated that numerous incentive options have been submitted to the government for the coal downstreaming program, particularly for the DimethylEther(“ DME’ ) project. According to Hendra, the incentive options that the government needs to consider for the DME project should cover the entire economic chain, from miners, producers, and offtakers to the end consumers of the final product.

“The entire chain needs to be evaluated in terms of its economic viability,” Hendra told Hukumonline.

Hendra explained that incentives such as 0% royalties and guaranteed extensions of business license are still insufficient to address the high economic value of the project. According to him, access to financing remains one of the key challenges, given that the cost of funds for the coal industry is higher compared to other industries.

The association is still in discussions with the government regarding what type of incentive model will eventually be provided. According to him, successful examples from other countries like China and South Africa cannot be directly applied due to differing national interests. “The discussions are ongoing to find a point of balance,” he said.