The Indian company had withdrawn its earlier application for South Sumatra as the rail and port infrastructure would be ready earlier in East Kalimantan.
The proposed smelter would depend on bauxite import from India, but draw upon local coal reserves to run a 1250MW captive power plant. The finished products would be exported. The smelter and power project is expected to cost $4bn.
Under an MoU, RAK Minerals and Metals Investments (RMMI) will provide 5Mt/y of low sulphur coal to manage the energy needs of the smelter.
MEC Coal is developing two coal blocks in the province with estimated reserves of 2bnt for which the construction work has begun.
MEC Infra will invest $1bn for constructing the 130km railway corridor to link the mine site at Muara Wahau to Bengalon on the east coast. MEC Infra has almost completed the land acquisition and cleared it for the corridor. Construction work could begin soon. MEC Infra expects to commission the first cargo train in 2011.
MEC Infra will also invest $250M in building a coal terminal capable of handling cape-size vessels. Land acquisition of 250 hectares for the terminal has already been completed.