Ras Al Khaimah to invest $5.2b in Kutai coal, power projects

Ras Al Khaimah Investment of the United Arab Emirates (UAE) plans to invest a total of US$5.2 billion to develop coal mines and an aluminum processing plant as well as their supporting infrastructure including a coal railway and a power plant in East Kutai, East Kalimantan, Kompas reported on Thursday.

Chairman of the Investment Coordinating Board (BKPM) Gita Wirjawan said in Jakarta on Wednesday that the Middle East firm would spend about $1.2 billion to build a 139-km railway for the coal transportation.

The project is expected to be completed in the next two years, he said, adding that the construction of the railway could be begun in March because land clearing of the project had been almost completed.

In December 2009, Director General of Railway at the Ministry of Transportation Tunjung Inderawan said that the ministry had issued the so-called "principle permits" to Trans Kutai Kencana, a joint venture between PT Kutai Timur Investama owned by the East Kutai administration, and Middle East Coal Private Limited, a subsidiary of Ras Al Khaimah Investment to build 130-km coal railway project in East Kutai.

Gita said that the company planned to develop a large scale coal mine in Kutai which is expected to begin production with a capacity of 1 million tons in 2010. The production will be gradually increased to 17 million tons in 2014, and 35 million tons in 2017

In addition, the company would also build a power plant with a capacity of 1,400 megawatt to provide a power supply for the company?s aluminum processing plant. The aluminum power plant, which will have a production capacity of 500,000 tons a year, is expected to begin commercial production in 2014. (*)