MAC: Mines and Communities

Kalimantan and Sumatra

Published by MAC on 2001-05-01

Kalimantan and Sumatra

Most major coal deposits lie on the two big islands of Kalimantan (Indonesian Borneo - with some 30% of known reserves) and Sumatra (68%). Found in sedimentary basins, they are usually amenable to open- pit (open cast) exploitation. Although government-owned coal companies have been substantially increasing output (notably PT Bukit Asam in south Sumatra), and there are a number of smaller, private, operatives, the most substantial mines (apart from Bukit Asam's) are run by foreign contractors. And, of these, the most important are located in east and southeast Kalimantan.

Deposits are commonly located close to major waterways, where barges can load onto bigger vessels at anchorage. Recent and continued expansion of the industry therefore depends on the construction of major new port facilities, capable of serving ocean-going transport. From the late eighties onwards, several multilateral agencies (among them the World Bank and CIDA) made sizeable loans to Indonesia, in order to finance improved transport infrastructure (with the main benefits going to foreign contractors) [Carolyn Marr Digging Deep: the hidden costs of mining in Indonesia, Down to Earth and Minewatch, London 1993]. But it was the completion in 1991 of Kaltim Prima's dedicated marine facility near Sangatta, East Kalimantan, which, according to one commentator, signalled the country's "true a competitive supplier to all the world markets" [Mining Engineering Sept 1990]. (In mid-1998 Indonesian company PT Senong Corp announced plans to construct a US$500 million railroad network in East Kalimantan to transport coal and forest products "around the province" - the World Bank, Asia Development Bank and US investment brokers, Newman International Ltd, were mentioned as possible funders [Jakarta Post July 28 1998]).

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