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The seaport is expected to handle vast amounts of coal and other natural resources. Photo: Reuters

Consortium led by South Korean company to build US$6.5 billion industrial zone in Indonesia

  • The project, which includes a seaport and power plant, will be built on 5,664 hectares of land in the country’s North Kalimantan province
A private consortium led by a South Korean company has announced that it will invest an estimated US$6.5 billion in a new industrial zone, seaport and coal-fired power plant in Indonesia’s North Kalimantan province.

The project will be built on 5,664 hectares of land at the Tanah Kuning-Mangkupadi international port and industrial zone, which is currently under construction.

Choi Jong-oh, CEO of consortium leader PT Dragon Land, said the exact amount to be invested will only be fixed once a feasibility study, bankrolled by the South Korean government, has been completed in about a year’s time.

Jo Sol, from South Korea’s Ministry of Oceans and Fisheries, confirmed that Seoul had agreed to grant Jakarta US$600,000 for the study.

The seaport alone is expected to cost US$700 million to construct, according to Choi, and will be equipped to handle a sizeable chunk of the vast quantities of coal and other natural resources that are extracted each year from Kalimantan, which comprises the Indonesian portion of the island of Borneo.

An employee of an Indonesian coal mining company checks a conveyor belt. Photo: EPA
Choi said that companies from as far afield as Japan, Australia and Europe had expressed interest in joining the project, with South Korean firms “especially interested in building the port and power plant”.

“The new industrial zone will provide chances for South Korean companies and others to advance [in] North Kalimantan, which Indonesia is seeking to raise as a key economic hub,” Choi said.

A coal mine in Indonesia’s East Kalimantan province. Photo: Reuters

In an earlier interview with The Jakarta Post , a spokeswoman for PT Dragon Land said that the power plant would be ready in less than three years once the feasibility study and an environmental impact analysis had been completed, while the seaport was expected to take slightly longer to construct.

“Meanwhile, we would try to finish all the infrastructure for the industrial zone in under a year,” she was quoted as saying.

Indonesian President Joko Widodo holds an umbrella for South Korean President Moon Jae-in during a tree planting ceremony in West Java in 2017. Photo: Reuters
South Koreans make up one of Indonesia’s largest expatriate communities with about 46,000 of them based there in 2016, according to the country’s Ministry of Foreign Affairs.
More than 2,000 South Korean companies are estimated to be operate in Indonesia and the two countries are aiming for bilateral trade to reach US$30 billion by 2022, Reuters quoted Indonesian President Joko Widodo as saying in September.
This article appeared in the South China Morning Post print edition as: Indonesian industrial zone wins backing