In the following are the independent opinion of Mr. Olle Östensson, Chief of Risk Management and Information Section, Commodities Branch from The UNITED NATIONS, UNCTAD (United Nations Conferences on Trade and Development) on his visit in Central Kalimantan Province.

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UNCTAD is currently carrying out several projects and activities that are relevant to development in regions dependent on mining. Among these activities are the establishment of mining networks in Africa and Latin America, involving governments, industry, NGOs and academic institutions, the organization of several workshops and seminars on development issues related to mining and, particularly relevant in the present context, the development of a framework for regional planning.

The framework is intended to assist in the identification of positive linkages between the mining sector and the rest of the local economy and thereby facilitate economic diversification. It consists of three elements: an economic model of the mining region, a geographical information system (GIS) and a structure for consultation with public and private stakeholders.

It is generally recognized that Kalimantan has a favourable geology for copper porphyry deposits, similar to established production areas such as those in Chile and the Philippines, and that deposits suitable for large-scale mining will eventually be identified and developed. It is of course not possible to estimate within what time period such development will take place. When it does, the impact on the local and regional economy is likely to be dramatic. Adapting to the resulting changes and maximizing the benefits of mining will pose challenges for mining companies, local and regional governments and affected local communities.

Kalimantan Gold Corporation (KGC), a junior Canadian mineral exploration company, has been engaged in exploration for precious and base metals in Central Kalimantan for the past twenty years, lately through its Indonesian subsididary Kalimantan Surya Kencana Limited (KSK). It holds a Contract of Work (CoW) with the Government of Indonesia covering an area of 124,200 hectares in the northern part of the Province, some 180 kilometres north of the capital, Palangka Raya, on the border with West Kalimantan Province. The exploration has resulted in the identification of potentially very large copper/gold porphyry deposits and polymetallic deposits. KGC's financial advisers have commenced a 3 to 6 month campaign to raise up to US $3 million in Europe. If successful, it will fund an extensive programme on one or more of KGC's 38 mineral prospects. Since early September 2002 its exploration team has been working intensively on four prospects to determine which of them will be the focus of the programme. Optimism within the team is at an all time high. If the results are positive, further detailed exploration would follow, and eventually, development work would begin.

Parts of Mr. Olle Östensson's opinion on several of aspects of Central Kalimantan Province quoted in the following menu.