China’s $4.6 Billion Investment in South Kalimantan: Impact, Potential, and National Challenges

WARTAINDONESIA Ver EN – Chinese investment in South Kalimantan continues to show a positive trend. This is evident from the injection of funds of US$300 million or equivalent to Rp4.6 trillion by Chinese company Qinfa Group Ltd., through PT Sumber Daya Energi (SDE) for the SDE 1 underground coal mine project in Kotabaru, South Kalimantan.

This investment is part of Qinfa Group’s plan to build three coal mine locations in South Kalimantan. SDE 1 mine is the first location to start operating, with a target production of 1.5 million tons of coal per year.

Deputi Bidang Pelayanan Penanaman Modal Kementerian Investasi, Ahmad Idrus, said that Qinfa Group’s investment in South Kalimantan is expected to boost national economic growth and investment realization targets.

“The investment from Qinfa Group is very important and strategic in order to realize these investment targets,” said Ahmad Idrus in the ‘First Production of SDE 1 Underground Mine’ event, Monday (December 18, 2023).

Ahmad Idrus added that Qinfa Group’s investment will also have a positive impact on the economy of South Kalimantan. This is evident from the absorption of local labor, increased regional revenue, and the development of supporting infrastructure.

“Local workers who have been absorbed reached 1,000 people, and will continue to increase as the mining project develops,” said Ahmad Idrus.

The construction of the SDE 1 underground coal mine has also had a positive impact on the economy of Kotabaru. This is evident from the increasing economic activity in Kotabaru, such as infrastructure development and increased public consumption.

“The construction of this mine has had a positive impact on the people of Kotabaru,” said Kotabaru Mayor Irhami Ridwan.

Irhami Ridwan hopes that Qinfa Group’s investment in South Kalimantan can continue to increase. This will have a greater positive impact on the economy of South Kalimantan.

Impact of Chinese Investment in South Kalimantan

Chinese investment in South Kalimantan has a broad positive impact, both for the national and regional economy. Here are some of the positive impacts of Chinese investment in South Kalimantan:

  • Increased economic growth

Chinese investment in South Kalimantan will boost national economic growth. This is evident from the increase in foreign direct investment (FDI) to Indonesia.

  • Increased employment absorption

Chinese investment in South Kalimantan will absorb local labor. This will reduce unemployment and improve people’s welfare.

  • Increased regional revenue

Chinese investment in South Kalimantan will increase regional revenue through taxes and levies. This can be used for infrastructure development and people’s welfare.

  • Infrastructure development

Chinese investment in South Kalimantan will promote infrastructure development in the region. This will improve people’s access to public services and increase regional competitiveness.

  • Increased national competitiveness

Chinese investment in South Kalimantan will increase Indonesia’s competitiveness in the international arena. This is evident from the increase in coal production and exports from Indonesia.

Challenges of Chinese Investment in South Kalimantan

Despite its broad positive impact, Chinese investment in South Kalimantan also faces some challenges, namely:

Environmental issues

The construction of coal mines can have negative impacts on the environment, such as water and air pollution. Therefore, efforts need to be made to minimize these negative impacts.

Social issues

The construction of coal mines can lead to social conflicts, such as land disputes and inter-community conflicts. Therefore, efforts need to be made to prevent social conflicts.

Security issues

The construction of coal mines can be targeted by criminal acts, such as theft and sabotage. Therefore, efforts need to be made to improve security at the mine site.

Chinese investment in South Kalimantan has a broad positive impact, both for the national and regional economy. However, this investment also faces some challenges, namely environmental issues, social issues, and security issues.

Therefore, efforts need to be made to address these challenges so that Chinese investment in South Kalimantan can be sustainable.

Asmita Hasibuan

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