UPDATE 1-Indonesia Rajawali to invest $1 bn in sugar, mining

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By Janeman Latul

JAKARTA, March 31 (Reuters) - Indonesia's Rajawali Group said on Wednesday it will use the $1.08 billion in proceeds from a share sale to invest in sugar plantations and mining, possibly including BHP Billiton's (BHP.AX) Maruwai coal mine project.

Rajawali, which is owned by businessman Peter Sondakh, sold a 23.7 percent stake in PT Semen Gresik (SMGR.JK), Indonesia's biggest cement producer, in a share placement overnight, raising total proceeds of $1.08 billion.

Darjoto Setyawan, Rajawali's managing director and spokesman, told Reuters that the group is still interested in investing in the Maruwai coal project owned by BHP Billiton.

Earlier on Wednesday, BHP Billiton (BLT.L) said it had entered a joint venture with PT Adaro Energy (ADRO.JK), Indonesia's biggest coal miner by stock market value, for the Maruwai coal mine project.

Rajawali also wants to expand its agribusiness and plantations, and will invest about $400 million in sugar plantations over the next four years including in the government-led food estate in Merauke, in Papua.

"We plan to invest in the huge sugar plantation at Merauke," said Darjoto.

"We expect to have 70,000 hectares in the next three to four years."

The Merauke food estate is a 1.6 million hectare, integrated area which the government has opened up to investment, with the aim of making Papua and Kalimantan self-sufficient and even able to export certain agricultural products. (Editing by Sara Webb)