Middle East invests in Indonesian mining

An investment arm of Ras Al Khaimah signs an MoU with South Sumatra province to develop its industry and infrastructure.
The government of the South Sumatra province in Indonesia signed a memorandum of understanding with Ras Al Khaimah Investment Authority, or Rakia, and RAK Minerals and Metals Investments (RMMI) to develop its industry and infrastructure.

The province of South Sumatra holds the largest resources of coal in Indonesia and aims to capitalise on this natural bounty by developing its industrial and logistic capabilities through the help of foreign direct investors.

Earlier this month the government of Ras Al Khaimah, which is part of the United Arab Emirates, formed RMMI so as to help build mineral supplies to cater to the growing demand for such resources. Rakia officials forecast theyÆll invest more than $1 billion in 2008 in Asia and Africa û however they say there isnÆt a breakdown of the $1 billion investment for individual projects in Asia so it is unclear how much of that money will go to the Indonesian development.

However, Ras Al Khaimah officials are billing this MoU with South Sumatra as a ôgiant leapö in executing its coal and mine strategy. The MoU signed by Rakia officials and Syahrial Oesman, the governor of South Sumatra, calls for developing an industrial park for metals refining, smelting and fabricating, a bio-technology park, and palm, rubber and other agricultural-based industries. It also includes building logistics infrastructure such as a rail transport corridor and a deep-water sea port to handle bulk and container cargoes.

The government of South Sumatra province, meanwhile, has agreed to provide sufficient land and fast-track the approval and licensing process to build a new port, industrial parks, a power plant, and residence and leisure facilities.

Ras Al-Khaimah is a 1,700 square kilometre region with a population of 250,000 in the northern part of the UAE, bordering Oman. Given its small size, its investment strategy would have to require looking overseas. It is counting on continued demand for key industrial minerals, such as coal, to double over the next 25 years.

ôThis is one of the most exciting turnkey projects that Rakia is undertaking and we believe that it has the potential to become a catalyst for our future organic growth in Asia,ö says Madhu Koneru, managing director of RMMI.

He adds: ôThe MoU is in line with our commitment to develop minerals and metal networks in the world. We have planned to invest more than $1 billion in 2008 towards development of strategic resources and infrastructure projects in Asia and Africa. The MoU with resource-rich Sumatra û where we plan to develop a suitable freight corridor and port infrastructure û will allow us to develop a cost effective and efficient export route of thermal coal and other natural resources to Asian and Middle Eastern markets.ö

Rakia and RMMI were formed under the patronage of His Highness Sheikh Saud Bin Saqr, Al Qasimi, crown prince and deputy ruler of the Emirates of Ras Al Khaimah. Rakia has already developed an industrial free zone and support infrastructures in Ras Al Khaimah û which it says has attracted investment of more than $5 billion in the last two years.
¬ Haymarket Media Limited. All rights reserved.
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