Kobe to upgrade brown coal

Japanese metals company Kobe Steel has announced that it will start a large-scale demonstration project in Indonesia to upgrade brown coal into high-rank coal for power generation. Although Indonesia has an abundance of brown coal, the high moisture content makes using it difficult.

Kobe Steel signed cooperation agreements with natural resources investment company Bumi Resources and its subsidiary Arutmin Indonesia. They will construct and operate a demonstration plant at Arutmin's Satui mine in southern Kalimantan, Indonesia. Total investments in the demonstration project are forecast to reach about 8 billion yen (£38 million).

Plans call for the construction of the 540 tonnes perday demonstration plant to start in late 2006. From the second quarter of 2008, trial production of Upgraded Brown Coal (UBC) will begin. Bulk samples of UBC will be supplied for trial use to a number of power companies, including Japanese power companies. The trial operation is to continue for two years, after which Kobe anticipates a commercial plant will be built in 2010.