Under the MoU, Powerindo Cipta Energy (PCE) of Indonesia and China National Chemical Industry Corporation (CNCEC) will establish a joint venture to implement the project. The plant, which is expected to be built near a coal mine in Aceh province’s Meulaboh district, will turn 1.1 million tonnes of coal into 600,000 tonnes of methanol per year, about half of Indonesia's domestic consumption.
Industry Minister Agus Gumiwang Kartasasmita said construction for the project is scheduled to begin in mid-2022 and employ 600-700 workers.
Muhammad Khayam, Director General of the Chemical, Pharmaceutical and Textile Industry of the Ministry of Industry, said the project will significantly increase the supply of methanol, while sharply reducing the import demand.
Coal is one of Indonesia's key products with reserves of more than 38 billion tons, enough to meet domestic demand until 2091 with an average mining rate of 600 million tonnes per year.
It is also the largest export commodity with a turnover of US$25 billion in 2020, followed by palm oil with US$20 billion, according to Indonesia's Central Bureau of Statistics (BPS).
