Indonesia key in RAKIA's expansion

Andi Haswidi, The Jakarta Post, Singapore 

Allocating some US$1.5 billion worth of capital investment for a mammoth project in South Sumatra, Ras Al Khaimah Investment Authority (RAKIA) says it sees Indonesia as key in its global expansion plan. 

"We are currently conducting a joint feasibility study of the investment with the South Sumatra government. We expect it to be complete within six months," Madhu Koneru, managing director of RAKIA's subsidiary, RAK Minerals & Metals Investments (RMMI), said Thursday in Singapore. 

Koneru said the investment plan aimed to build an entire mining-to-export chain of coal industry and several other potential industries. 

Considering it has the largest reserves of coal in the country, South Sumatra's government, Koneru said, was aiming to capitalize its strategic location and get full benefits from its natural resources, and induce social and economic growth by attracting investment. 

The planned infrastructure development, he said, would include world-class integrated industrial infrastructure including a rail transportation corridor and deep-water sea port to handle bulk containers and cargo. 

"RAKIA will basically invest in developing the Tanjung Api-api Port, aiming to acquire about 20 percent of shares in the port," Koneru said. 

The railway (expected to span 90 kilometers) will connect the port with Palembang, focusing on catering for trains delivering supplies to and from the port. 

"Besides supplies, we would also be open to other options for the railway -- maybe for commuters; it depends on the local government's decision," Koneru said. 

As a subsidiary of RAKIA, RMMI would be in charge of the industrial park, which would include a metal refinery and smelting and metal based fabrication industries, Koneru said. 

RMMI is 50 percent owned by mining company Trimex Group and the remaining 50 percent is owned by RAKIA -- wholly owned by the Ras Al Khaimah government, one of the seven kingdoms of the United Arab Emirates. 

Koneru said the Ras Al Khaimah government had been in the mining business for the past 50 years, focusing on resources for construction such as limestone. 

"The world's tallest tower, Burj el-Dubai, was built using cement and concrete from RAK natural resources." 

"So we are not new to the mining business, it's just that we decided to go global," he said. 

On March 19, he said, RAKIA and RMMI met with President Susilo Bambang Yudhoyono in UAE, where the two companies presented their strategic plans to expand investment footprints across the world in the minerals and metals sector. 

"Investment in Indonesia is a key step in the company's strategy to scout potential growth zones in Asia," he said. 

Outside the investment plan in South Sumatra, Koneru said, RMMI was exploring two potential coal-mining fields in Kalimantan, but refused to elaborate. 

As part of its global expansion, RMMI has so far invested $250 million in the Congo by acquiring stakes in two mining companies, and another $200 million in Eastern Europe by acquiring an Armenian mining firm, TSCC Armenia.