September 29, 2010 / 8:57 AM / 9 years ago

Indonesia to send army to quell ethnic clash in Borneo

JAKARTA, Sept 29 (Reuters) - Indonesia’s government is sending an army battalion and hundreds of paramilitary police on Wednesday to quell an ethnic clash in the coal-producing East Kalimantan province on Borneo island that killed three people.

Police said the town of Tarakan, about 100 km (62 miles) south of the border with Malaysia’s Sabah, was tense, with offices shut and some houses burned as local people armed with machetes and spears searched for an immigrant ethnic group.

The government action to stop the fighting between local Tidung people and the Bugis Latta group, who are often wealthier in a strong regional economy, is aimed at avoiding a repeat of a clash a decade ago in central Kalimantan that killed hundreds.

“I hope what happened in East Kalimantan now does not repeat what had happened in the past, therefore it needs concerted, quick and precise steps to handle this situation,” President Susilo Bambang Yudhoyono said on Wednesday.

Ethnic tensions have mostly faded in the last 10 years, and any escalation of communal violence could threaten the stability that is increasingly attracting capital inflows to the country’s markets and foreign direct investors to infrastructure projects.

(For factbox on risks in Indonesia see [ID:nRISKID])

Coal production in East Kalimantan accounts for more than half of total output in the world’s top thermal coal exporter, though there was no sign of output being disrupted. Chevron Corp (CVX.N) and PT Berau Coal Energy Tbk BRAU.JK said their operations in East Kalimantan were not affected.

Bob Kamandanu, the chairman of the Indonesia Coal Producers Association, told Reuters there could be administrative problems since offices such as customs, surveyors and the port office in the coastal town were closed.

Indonesian coal firms operating in East Kalimantan also include PT Kaltim Prima Coal, a unit of leading miner Bumi Resources Tbk (BUMI.JK).

For an analysis on prospects for coal infrastructure plans in Kalimantan see [ID:nSGE66407K] Reporting by Olivia Rondonuwu and Fitri Wulandari; Editing by Neil Chatterjee

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