SASOL seeks tax holiday to develop coal liquefaction project

South Africa Synthetic Oil Liquefaction (SASOL) Synfuels International, a synthetic fuel giant producer from South Africa, is seeking a tax holiday from the government for its proposed coal liquefaction plant project.

Investment Coordinating Board (BKPM) chairman Gita Wrijawan said in Jakarta on Thursday that the company would invest up to US$10 billion to build a coal liquefaction plant in Indonesia

Gita said that Sasol had asked for a tax holiday a precondition for its investment in Indonesia. ?Without the tax holiday, the company will unlikely be able to realize its investment plan,? he said.

According to Gita, such a tax holiday will not affect the government?s tax revenue but will instead be able to create new tax payers.

SASOL announced in December 2009 that it has signed an MoU with the government of Indonesia to study viability of setting up coal-to-liquid facility to produce approximately 80, 000 barrels per day of high quality ultra-clean transportation fuels, from Indonesia's abundant domestic lignite coal reserves.

In January 2010, Bukin Daulay, Head of Research and Development Centre for Mineral and Coal Technology at the Ministry of Energy and Mineral Resources said that SASOL has short-listed three potential partners for its proposed coal liquefaction plant in Indonesia

The three candidates are state coal mining firm PT Tambang Batubara Bukit Asam Tbk (PTBA), PT Pendopo Energi Batubara (PEB) and PT Bhakti Energi Persada (BEP). (*)