REPUBLIKA.CO.ID, JAKARTA - The government will launch a program to develop downstream coal industry to increase the coal added value, according to an official.

Mineral and coal director general R Sukhyar said the government was revising the government regulation (PP) No 23 of 2010 on downstream coal industry.

"Revision of the PP would be issued soon," Sukhyar said here on Tuesday.

Under the draft regulation of the PP No 23/2010, there will be four forms of downstream coal products. They will be coal products with higher calorific value, coal gas, liquid coal and coal in the form of slurry used for small power plants. Revision of the PP will be strengthened with a business regulation in the form of regulation of the energy and mineral resources (ESDM) minister that will set coal prices.

"The ministerial regulation would be issued this year," Sukhyar said.

He said the program to increase the added value of coal would need more favorable fiscal policy support.

"Without change in fiscal policy, it would be difficult for business players to invest in downstream coal industry," he said.

He said coal should be used as a basic material instead of as a source of energy. If the coal is processed into oil, the price will be higher at around 110 USD per barrels, much higher than coal price in the world market. The program to increase the added value of coal has been regulated in the Law No. 4 of 2009 on mineral and coal mining.