Australia to invest US$2.5b in mining, agriculture sector
Urip Hudiono, The Jakarta Post, Jakarta
Several Australian companies have affirmed their plans to invest US$2.5 billion in Indonesia, mainly in the mining and agricultural sectors.
Mining giant BHP Billiton Limited would be the biggest investor, contributing $1.7 billion.
"The companies made an immediate response to President Susilo Bambang Yudhoyono's meeting last week with Australian Prime Minister John Howard," Coordinating Minister for the Economy Aburizal Bakrie said on Monday.
"The affirmation also reflects foreign investor confidence in the improving business climate here," he said.
Aburizal said BHP Billiton had been looking to explore and mine the potentially huge coal resources in Central Kalimantan.
"They are also looking into other mining opportunities on Gag Island," he said, referring to the island in Papua.
BHP Billiton has a 75 percent stake in PT Gag Nickel, a company that is seeking to mine 216 million tons of laterite nickel deposit worth $800 million on Gag Island. However, the firm has indicated that it would stop the mining activities should the United Nations put the island on its World Heritage list for marine biodiversity.
Aburizal said an Australian firm in the explosives industry had also confirmed its investment plan worth $120 million.
"Another Australian agriculture company, meanwhile, will also build a dairy product factory here," he added.
During his visit to Australia last week, Susilo met with the representatives of several Australian companies including BHP Billiton, mining and blasting products manufacturer Orica Limited, ANZ Banking Group, Futuris Corp and Newmont Australia.
In the meeting, the government promised to address the companies' complaints of corruption, decentralization, labor regulations and weak bureaucracy.
Besides Australia, Aburizal said other countries had also expressed their interest in investing in Indonesia, with China leading the pack.
"We will soon sign a memorandum of understanding with China for their investment plans in the natural resources sector," he said, adding that China -- along with Malaysia -- was also interested in investing in major infrastructure projects like toll roads and power stations.
"Singapore and the Netherlands, meanwhile, have shown their interest in airport and drinking water projects."
The government offered a first batch of 91 major infrastructure projects worth US$22.5 billion during the Infrastructure Summit in January. Another batch of infrastructure projects worth $57.5 billion will be offered later this year.