Mining Industry Grows Slow in Mineral Rich East Kalimantan

TEMPO.CO, Jakarta - East Kalimantan recorded a sluggish growth of 1.2 percent year-on-year in the mining sector in the third quarter of this year slowing from a growth of 2.6 percent in the previous quarter.

"The shrinking growth of the mining sector contributed to East Kalimantan economic slowdown in the third quarter of this year," head of the representative office of Bank Indonesia for the region Muhammad Nur said on Saturday.

The province recorded an economic growth of only 3.5 percent slightly down from 3.6 percent in the previous quarter. Mining sector has been the lifeblood of the economy in the province, which is rich in coal and oil and gas reserves.

The mining sector dominates the economy of East Kalimantan accounting for 43.3 percent of its income, followed by the manufacturing sector accounting for 20.5 percent , the construction sector for 8.3 percent, the farming sector for 81 percent and the trading sector for 5.6 percent in the third quarter of 2017.

East Kalimantan's coal production grew 5.8 percent year-on-year to 53.8 million tons in the third quarter of 2017, slowing against a growth of 7.8 percent in the previous quarter.

Heavier rain was attributed to the slowdown in the coal production of the province in the third quarter. Flooding hampered the process of hauling coal from the mines to seaports.

In addition, domestic consumption of coal fell below the target set by the government for the third quarter of 2017.

The domestic consumption of coal is expected to reach 107.9 million tons or 26.13 percent of the country's production predicted in 2017. The country exports most of its coal production mainly to China and India.

ANTARA