Monday, September 25, 2023

BUMI Resources secures new strategic partner for coal downstreaming project

Reading Time: 2 minutes
Journalist IBP


Mahinda Arkyasa



PT Bumi Resources Tbk. (BUMI), a subsidiary of Bakrie Group, has recently obtained a new strategic partnership from China for the development of downstreaming its coal products, specifically in the ammonia sector.

Initially, BUMI had planned to convert coal into methanol. However, with the arrival of the new partner, BUMI is now targeting the transformation of coal into ammonia.

“We have recently changed partners to a Chinese company. We are now approaching the basic engineering design phase,” said Adika Nuraga Bakrie, the President Director of Bumi Resources, on May 31, 2023. 

Previously, BUMI had terminated its cooperation plans with the American energy company, Air Products, which had withdrawn from the coal downstreaming project for Dimethyl Ether (DME) in Indonesia.

However, the company retained a contract with a Chinese company SEDIN Engineering Co., Ltd., but, it is unknown which company took the partnership on ammonia.

BUMI continues downstreaming injurey

Bakrie explained that the departure of the American company was settled amicably and that BUMI will continue its coal downstreaming project despite the loss. 

The decision was driven by the extension of the coal contract and the promising prospects of the downstreaming business. 

Additionally, Adika anticipated that the ammonia downstreaming plant would be smaller in scale compared to the original plan of developing a methanol plant. 

Consequently, the capital expenditure would be lower. The specific details regarding the size of the plant are still being calculated.

With the change in partners, the new downstreaming project is currently in the detailed engineering design (DED) phase. 

Due to the smaller scale, the coal requirements for downstreaming will also be reduced. 

The projected completion time for the plant is 36 months but may be completed sooner. With the groundbreaking estimated to take place in Q1 2024, it means the plant can start operating in Q1 2027.

Furthermore, regarding ownership of shares, BUMI, through Kaltim Prima Coal, will hold a minimum share of 25%, while PT Arutmin Indonesia will also hold a minimum share of 25%, totaling at 50%. 

“Both KPC and Arutmin must each have a minimum of 25 percent ownership, with a minimum of 25% in KPC and 25% in Arutmin,” he explained.

“We have an aggressive target since we have just switched partners, and the target is to have a groundbreaking ceremony by early 2024. Hopefully, we can achieve this target as we are still in the preparation phase after changing partners,” concluded Bakrie.

Journalist IBP


Mahinda Arkyasa




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