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Indonesia's Coal Capital Upgrades Its Airport

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The Indonesian city of Balikpapan is forging ahead with a recession-defying infrastructure upgrade, with the city's airport being one of its major projects.

The expansion of the city's Sepinggan Airport, which was originally designed for less than 2 million passengers but which now sees almost three times as many in a year, is currently underway.

After the USD$230 million upgrade, due to be completed in October 2013, the airport will be able to handle 10 million passengers.

"We had no choice but to build a new bigger terminal because we expect the number of passengers to continue to increase," said Handy Heryudhitiawan, a spokesman for developer Angkasa.

Once a sleepy fishing village, Balikpapan now has facilities to rival the capital Jakarta, largely due to the commodity boom of the past decade which saw it become a base for global and local mining firms working the coal and gold seams of East Kalimantan province.

"Balikpapan was a place you flew into and flew out of," said a senior mining industry executive who declined to be named.

"Now you've got lots of new hotels, serviced apartments on the beach. Before there was only the Balikpapan Mall, now you've got three or four major malls. Balikpapan has changed dramatically in the last five years."

(Reuters)