Russian firms are to invest up to $6 billion in Indonesia’s mining sector in 2014, according to the South East Asia country’s chief economic minister, Hatta Rajasa. Projects include a refinery in West Kalimantan to process bauxite and a railway in Borneo to transport coal to a port.
Rusal — said to be the world’s second-largest producer of aluminium, after Chalco of China — has signed a Memorandum of Understanding to build the refinery with a local company.
The Russian company previously signed an MoU in 2007, but decided against investing when the global financial crisis hit.
Oleg Deripaska, the chief executive of Rusal, said: “We have long stated our desire to expand into this important South East Asian market, given its increasing prominence on the global mining stage.” Construction of the railway will begin in 2016.
The announcement was made during a trade delegation to Jakarta led by Russian Deputy Prime Minister Dmitry Rogozin.
Indonesian manufacturers welcomed the move, following the recent government ban on the export of some unprocessed mineral ores, which led many companies to delay projects and investments.
The ban was intended to force Indonesian mining companies to build smelters and process their raw materials domestically. Previously, Indonesia provided around 60% of China’s bauxite imports.