Madhu Koneru MEC USD 5 Billion development in East Kalimantan

1
MECs USD 5 Billion development of integrated
industrial facilities in East Kalimantan is on
track

• Madhu Koneru
• Executive Vice Chairman

2
MECs USD 5 Billion development of integrated
industrial facilities in East Kalimantan is on
track
(Dubai) December 15, 2009 In a meeting between
Indonesian President Susilo Bambang Yudhoyono and
Crown Prince and Deputy Ruler of Ras Al Khaimah
HH Sheikh Saud Bin Saqr Al Qasimi it was
announced that the first-ever private railway in
Indonesia is ready for construction. President
Yudhoyono and HH Sheikh Saud were joined by Gita
Irawan Wirjawan, Chairman of the Indonesian
Investment Coordination Board (BKPM), Madhu
Koneru, Group CEO of MEC Holdings, Hari Sankaran,
Managing Director and CEO, Infrastructure Leasing
and Financial Services Limited (ILFS) and Allen
Alexander Chairman , President and CEO of
SavageCANAC Corporation MEC Coal and MEC Infra,
joint ventures between the Ras Al Khaimah
Investment Authority proposed the development of
the 130 km railway to facilitate the transport
raw materials and finished products in and out of
the East Kutai regency in Indonesias East
Kalimantan Province. This project is fully
supported by the Indonesian Investment
Coordinating Board as well as the regional
governments of East Kalimantan province and East
Kutai regency.
3
MECs USD 5 Billion development of integrated
industrial facilities in East Kalimantan is on
track
"This undertaking will create multiple benefits
to the development of the local economy in East
Kalimantan. It sets a positive tone for future
investments from the Middle East," said President
Yudhoyono We are truly grateful to President
Yudhoyono and to Gita Wirjawan, Chairman of
Indonesias Investment Coordination Board for
their vision, leadership and support for this
important infrastructure development project,
said HH Sheikh Saud. This type of
public-private, Middle Eastern-Indonesian
initiative is a fantastic example of what can be
accomplished when the fundamentals make sense for
all parties involved. This project will help meet
the development needs of East Kalimantan
communities, while also serving to meet the
energy challenges in Asia , particularly India
and China. MEC Infra will invest US1 billion
in constructing the 130 kilometre railway
corridor to link the mine site at Muara Wahau to
Bengalon on the coast. Despite certain
perceptions about Indonesia, MEC Infra was able
to purchase and clear the land for the entire
130km corridor within a few months.
4
MECs USD 5 Billion development of integrated
industrial facilities in East Kalimantan is on
track
MECs mine and railway are central to the
development of a complex of integrated industrial
facilities that will include a power plant
fuelled by coal from MEC Coal, an aluminium
smelter, a fertilizer plant and a high capacity
port terminal with a total integrated investment
valued at US5 billion. MEC has formulated
strategic partnerships with industry leaders to
realize the Mines to Market vision. Together
with MECs Madhu Koneru we see the appointment of
these industry leaders as a testament to
Indonesias burgeoning future. This investment
serves as a huge vote of confidence from an
investor base that Indonesia shares long term
strategic interests with" said Mr.
Wirjawan NALCO With equity partner NALCO, an
Indian government entity and Asia's largest
integrated aluminium complex, MEC and NALCO
proposed to invest US2 billion in a Greenfield
aluminium smelter producing 500,000 tons of
aluminium per annum. A further US2 billion
investment will build a 1,250 MW captive power
plant and other auxiliary facilities for the
smelter
5
MECs USD 5 Billion development of integrated
industrial facilities in East Kalimantan is on
track
CANAC - MEC is partnering with global railway and
transportation services leader, CANAC for railway
and port operations and maintenance. ILFS -
ILFS Transportation Networks Limited, (ITNL) a
subsidiary of Indias Infrastructure Leasing
Financial Services (ILFS) Group provides MEC
financing to build the transportation
infrastructure, railway network and deep sea
port. The agreement is on a build, finance and
transfer basis. MEC and ILFS Group hold a shared
vision of bringing coal to India, firmly
believing the partnership will provide
significant benefits for India. The land
acquisition is almost complete and the project is
on schedule. In the next five years MECs
investments alone will create 5,000 new jobs in
East Kalimantan. More important, it will
transform East Kalimantan into a model for the
future of Indonesia by providing a strong
platform for growth, helping Indonesia to attract
further investments of US 20 billion by 2030 and
creating more than 100,000 jobs, said MECs
Koneru. We are proud to play a role in enhancing
the standard of living for the local communities
and will remain committed to doing so long after
the railroad is built.
6
MECs USD 5 Billion development of integrated
industrial facilities in East Kalimantan is on
track
Additional MEC East Kalimantan Project
Investments ?MEC will invest US250 million in
building one of the largest coal terminals in
East Kalimantan, able to handle cape-size
vessels. ?With proposed equity partner NALCO,
an Indian government entity and Asia's largest
integrated aluminium complex, MEC plans to invest
US2 billion in an aluminium smelter producing
500,000 tons of aluminium per annum. ?A further
US2 billion investment will build a 1,250 MW
captive power plant for the smelter ?Building
the rail corridor will also enable the
development of joint agricultural ventures such
as a coal-based fertilizer plant, as well as the
transportation of aluminium and other commodities
including agricultural products and coal.