Rajawali to Invest in Sugar, Mining

Jakarta Globe, Reuters & Yessar Rosendar, March 31, 2010

PT Rajawali Corporation said on Wednesday it will use the $1.08 billion raised from the sale of its 23.7 percent stake in cement maker PT Semen Gresik to invest in sugar plantations and mining, possibly including BHP Billiton’s Maruwai coal mine project.

Darjoto Setyawan, Rajawali’s managing director, said the group is still interested in investing in the Maruwai coal project in Central Kalimantan.

Earlier on Wednesday, BHP Billiton said it had chosen PT Adaro Energy, Indonesia’s biggest coal miner by market value, as a local partner to help develop the Maruwai project, less than a year after it had abandoned the project. Adaro will get a 25 percent stake in Maruwai.

Darjoto said Rajawali would invest about $400 million in sugar plantations over the next four years, including in the government-led food estate in Merauke, Papua. “We plan to invest in a huge sugar plantation at Merauke,” he said. “We expect to have 70,000 hectares in the next three to four years.”

Rajawali is also planning to offer its remaining 1.25 percent stake in Semen Gresik to the government, which currently owns 51 percent of the company.

The government said it had not yet decided whether to buy the Semen Gresik shares.

“We can’t decide now. We have to study it first,” said Muhammad Said Didu, secretary at the State-Owned Enterprises Ministry.