The Coal Trader

Indonesia’s Adaro plans to diversify

Indonesian coal producer Adaro Energy has firmed up its diversification plans as part of a broader goal to shift its core business away from thermal coal by up to 2030.

Adaro will focus mainly on expanding its metals business and growing its power generation vertical with a large-scale hydropower project already in the works, the company said.

It will also focus on developing its coking coal operations, with a target of reaching up to 6mn t by 2025. Its coking coal sales are expected to reach 3.8mn-4.3mn t this year. Growing metallurgical coal business would make sense as steel would continue to be used by many industries, even as countries shift to cleaner sources of energy for electricity generation, it said.

Adaro has also started construction of its aluminum smelter in North Kalimantan. Stage one operations are targeted to start by the end of 2025 with an initial production capacity of 500,000 t/yr, until it reaches full capacity of 1.5mn t/yr over the following years.

Adaro is also constructing a hydropower electric plant to serve the power needs of the smelter as well as provide electricity to other industries in the region. The 1.375GW hydropower plant is likely to cost roughly $2.6bn and will be online by 2030.

The company had in 2022 indicated its aim to diversify into non-thermal coal businesses, following a broad trend in the industry aimed at expanding alternative revenue streams and reducing carbon footprint.