Upgrading LRC (Low Rank Coal) looking attractive

With some thermal coal prices soaring to over US$150/t and declining supplies of high- quality coal worldwide, upgrading of Indonesia’s low rank coal (LRC) is becoming an increasingly attractive option.
Long regarded as uneconomical to mine because of its high moisture and low heat value, LRC now is being seen more as an alternative fuel to bituminous coal, principally for power generation. At an estimated 60.8Bt, LRC – coal with a calorific value below 5,100kcal/kg – accounts for some two-thirds of Indonesia’s total coal resources.

Now, a raft of industrial companies is pushing ahead with proposals to start building a potentially very large industry for Indonesia based on upgrading its LRC.
Australia’s White Energy, which is constructing an initial 1Mtpa capacity coal upgrade plant at the PT Bayan Resources Tabang mine in East Kalimantan, has unveiled plans for a matching-size plant at one of Adaro’s mines in the same area.
US-based Carbon Development Corporation, with South African mining company, Exxaro, is reported to be planning entry to the “new” LRC industry.
A new venture, PT Upgrading Brown Coal Indonesia (UBCI), a subsidiary of Japanese steel manufacturer Kobe Steel, plans to start trial operations of a US$72M demonstration upgrading brown coal (UBC) plant at PT Arutmin Indonesia’s Satui mine in South Kalimantan.
UBCI president director, Masashi Wakagi, told delegates at the recent Coaltrans Asia conference in Bali that the plant will operate from August this year to March 2010 and use 1,000t/d of raw coal to produce 600t/d of higher quality product for testing in commercial boilers in Japan and Indonesia.
He says success from the demonstration plant will mean that UBCI will step up to a 1.7Mtpa commercial-scale plant – either in Kalimantan or Sumatra – with construction scheduled to start mid-2010.
UBCI says it expects its upgrading process to reduce total moisture content of typical Indonesian LRC “A” from 33% to 8% and increase calorific value from 4,100kcal/kg to 6,350kcal/kg – a heat content comparable with bituminous coal – leaving ash content and residues unchanged.
Upgrading brown coal process of Indonesia LRC “A”

Wakagi concedes that moisture levels of the feeder coal dictate production costs in the upgrading process, with higher moisture coal requiring more energy and more equipment, and reducing output against raw coal inputs.
He says UBCI hopes to hold its upgraded coal production cost to less than $10/product tonne, benchmarked on raw coal with 40% moisture.
Wakagi says moisture evaporation-related energy loss of burning upgraded LRC is about one-third that of raw low rank coal. Even accounting for energy loss in the upgrading process, there is net benefit through the use of upgraded LRC for power generation if the moisture content of the raw LRC is greater than 35%.
UBCI says carbon dioxide emissions are also reduced if an integrated upgrading plant and power plant use coal with moisture content greater than 25% before it is processed.
Depending on the raw coal characteristics and the design and operation conditions of the boiler, some slagging may occur, Wakagi says – but the problem can overcome by blending the upgraded LRC with bituminous coal.
Wakagi told Reuters in Bali that the production costs of converting LRC to a product coal with the energy characteristics of bituminous coal would be US$70- $90/t, including the purchase of the LRC and plant investment costs.

Aside from some proprietary differences in coal upgrading technologies, the general process involves crushing the LRC and mixing it with heavy oil to form slurry, which then is heated in an evaporator to remove moisture, with most of the oil recycled.
UBCI’s upgrading process is designed to limit oil loss to 0.5% per tonne of upgraded product. The powdered form of the upgraded coal is briquetted for easy transportation, also minimising dust and lowering the risk of spontaneous combustion and moisture rebound.
Deputy chairman of the Indonesian Coal Mining Association, Kaz Tanaka, has called on the country’s central and local governments to cut royalties as an added incentive for development of LRC as an alternative fuel for domestic power generation.
He says mine mouth coal-fired power plants using LRC could be developed as part of Indonesia’s current crash program to boost power generation.
Clean coal technologies for LRC, such as coal gasification, liquefaction and coal upgrading, should also be promoted, he says. – Peter MacDonald, with reporting by John O’Neil.
Characteristics of Indonesia’s Low Rank Coal
Mining location Moisture (%ar) Ash (%adb) Sulphur (%adb) Calorific Value (kcal/kg)
Riau 30-42 7-19 0.2-0.5 4,100-4,500
South Sumatra 40 3.8 0.2 5,400
South Kalimantan 38-42 2-3.3 0.1-0.2 4,300-4,700
East Kalimantan 32-41 3-5 0.1-0.7 4,600-5,500
Irian Jaya 42 5.4 0.75 5,500

Source: Ministry of Energy and Mineral Resources/DH Power

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