REPUBLIKA.CO.ID, PALANGKA RAYA -- Investors wanting to develop mineral reserves in Central Kalimantan are reminded that they are expected to build their smelters.

"They must not thinks only to exploit the natural resources and exports the raw materials," Minister for National Development Planning Board and head of the National Development Planning Board (Bappenas) Andrinof Chaniago said.

In line with the government agenda the national priority in industrial development in Central Kalimantan both in the energy and other sectors is development of processing industry that will increase added value, Adrinof said here on Sunday night.

"I just heard from the governor that there are investors interested in developing bauxite and iron ore reserves in this province. We will see that there must be smelters to process the minerals ores here," he said, adding,"they must not exports unprocessed materials."

The minister was to speak at a meeting on Central Kalimantan Development Plan here on Monday.

He said before embarking on large scale development of downstream industry the government would build infrastructure including power infrastructure in Central Kalimantan.

He said the government wants to build power plants with a total capacity of 1,000 megawatts in 2015.

He said the province has large reserves and production of coal but it has been beset by shortage in power supply.

Currently electrification ratio in Central Kalimantan is 70 percent.

Most of power supply has been for households in the province only a small part for the industrial sector.

Adrinof said development of power plants in Central Kalimantan is also needed to support development of industrial estates in the province.

"Development of power plant is more vital to support the process of industrialization . Port development could follow," he said.

He believed the power plants with a total capacity of 1,000 MW could be carried out this year and in 3.5 years, the province could have an industrial estate.

"If there is surplus in power supply, it could be supplied to Java," he said.

He said the reform launched by BKPM in the licensing procedure through its 'one stop service' initiative is expected to attract more investors.

In addition to non fiscal stimulus in the form of the licensing facility, investors in power generating sector should have fiscal incentives, he said.

"For example, companies planning to build power plants could be offered a cut in royalty or export tax," he cited.

He said areas that rely on natural wealth should optimize the use of their natural riches for their economic development.

Therefore, the plan to build facilities and infrastructure such as railways for coal transport and other projects would go through studies that would first consider the interest of the local people, he said.

Central Kalimantan is the largest province in Kalimantan, known to have large reserves of precious metals, base metals, other minerals and coal.

The province has coal indicated reserves of around 1.05 billion tons with proven reserves of 40 million tons.

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