Indo Tambangraya (ITMG) Subsidiary Works on Coal Gasification Project


Coal issuer PT Indo Tambangraya Megah Tbk (ITMG) is working on the coal gasification project through its subsidiary PT Indominco Mandiri (IMM). The coal gasification project is estimated to require an investment of around US$ 200 million and is targeted to operate commercially in 2025.

Indominco Mandiri has conducted an initial study of this coal gasification project with the Mineral and Coal Technology Research and Development Center of the Ministry of Energy and Mineral Resources (Tekmira) and completed at the end of 2022.
As a result, the coal gasification project with an underground system (underground coal gasification / UCG) has the potential to be developed.

“From the study of this project, when we worked on it, it turned out that it produced gas. Our target will be for the fertilizer industry. This year we will conduct a trial to determine the characteristics of the gas,” said Era Tjahya Saputra, Head of Mining Engineering at Indominco Mandiri, when met in Bontang, Saturday (18 /3).

The ITMG coal gratification project already has its main target market. Indominco Mandiri revealed its plans to sign a memorandum of understanding (MoU) with PT Pupuk Kalimantan Timur (PKT) in March 2023.
“Because if you are not close to the customer, there will be logistics and processing costs. We and PKT really need each other. From Tekmira’s data, PKT in this case will have a limited gas supply starting in 2027-2028,” said Era.

Going forward, Indominco Mandiri will transfer gas from coal gasification to PKT to process around 660,000 tons of fertilizer per year. To meet the demand for fertilizer, Indominco Mandiri will supply around 2 million-3 million tons of coal in the gasification process.

Under these conditions, Indominco Mandiri is optimistic that its coal gasification project can be realized properly. On the one hand, apart from having a clear long-term market, his party also has support from the gas network infrastructure which is planned to use Pertamina’s existing facilities.

This project is projected to increase the economic potential of coal that previously could not be mined. What’s more, the UCG system does not damage the surface area of the ground and will reduce drilling costs and also protect the environment.
“If this project is successful, our potential is huge and we are trying to succeed. Currently, only 30% of the potential reserves that can be mined are 70% cannot be extracted because of economies of scale, the costs are expensive,” said Era.

Currently, Indominco’s average coal production is around 6 million-7 million tons per year. This production is outside of coal production from the UCG project, which is around 2 million-3 million tons per year.
“Our coal reserves are around 70 million tonnes. This amount can support ITMG operations. We also export to China, India, Bangladesh and to Japan,” said Era.


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