A German investor to inject US$700m for Laut Island mining

An unspecified German investor will inject US$700 million for coal mining activities in Laut Island, South Kalimantan, according to an assistant to the South Kalimantan governor for economic affairs, Armain Janit.

Armain said that the mining sites that would be exploited would be the areas formerly belonging to PT Arutmin Indonesia, a company that controls around 10,000 hectares of mining concession on Laut Island.

"The investors' willingness to provide $700 million was expressed during the recent Hannover Expo," Armain said in Jakarta on Monday.

But Armain refused to disclose the identity of the investor.

He noted that the arrangement with the German investor would be in the framework of people's mining activities on the island, using an integrated coal mining system.

The investor would give technical assistance for underground mining technology, build infrastructure and provide transportation means.

"As for the development of the mining itself would be conducted by a local company, involving local people through cooperatives, and the products would be bought by the investor using development funds already disbursed," he said.

Armain noted that if that system worked well, it would also be implemented in other areas in South Kalimantan in a bid to fight against the rampant illegal mining activities.

A number of non-governmental organizations and also local people have been campaigning against mining activities on Laut Island as it would cause environmental destruction for the island that would not be reparable for years. (*)