Indonesia Keeps Pulling Value Onshore — Now Coal Into Methanol

A US$2.3bn plant with a Chinese EPC partner will convert East Kalimantan coal into 2m tonnes of methanol a year.

The read. On 29 July, a joint venture that includes China National Chemical Engineering (CNCEC) signed US$2.3bn in engineering and construction contracts for the plant. It is due to start commercial production in 2030, turning East Kalimantan coal into 2 million tonnes of methanol a year, and is built to expand to 3.6 million. Behind it sits a bigger change: from 1 January 2027, all Indonesian coal exports go through Danantara, which becomes the country’s sole coal exporter. Jakarta is arranging things so that less coal leaves raw and more of its value stays in the country.

What to watch. For Chinese engineering and process-technology firms, the way into Indonesian coal now runs through building the downstream plants. For anyone who buys or finances Indonesian coal exports, the number to watch is export volume: as the gateway and the plant come online, a growing share of Indonesia’s coal may be put to use at home.