Indonesia has recorded a $2.3 billion investment in a coal-to-methanol downstream project in East Kalimantan, advancing its strategy to cut methanol imports and increase value-added processing of domestic coal resources, the Investment Ministry said on July 29.

PT Bumi Etam Chemical (BEC), a subsidiary of the country's leading mining company PT Bumi Resources Tbk (BUMI), signed the front-end engineering design contract and an engineering, procurement, construction and commissioning framework agreement in Jakarta for the gasification facility in East Kutai district.

The project is designed to produce 2 million tonnes of methanol annually using 7.78 million tonnes of low-calorie coal per year. Commissioning is targeted for 2029, with commercial production starting in 2030. The $2.3 billion investment will be realized through this project.

Director of Mineral and Coal Downstreaming Rizwan Aryadi Ramadhan said the investment would generate broader economic benefits for surrounding communities and the country, while encouraging the developers to strengthen national technological capabilities through technology transfer.

The coal gasification project demonstrates how stakeholder collaboration can support Indonesia's objective of reducing dependence on imported methanol, Rizwan said, adding that it would strengthen resource sovereignty, create jobs and improve community welfare.