🌍 The Discovery That Sparked Global Ambitions 

In the mid-2000s, deep in the coal-rich jungles of East Kalimantan, a remarkable discovery was made. It was called the East Kutai Coal Project (EKCP). According to geological surveys, the deposit contained 2.7 billion metric tons of coal low in sulphur, low in ash, high in promise. The numbers were staggering: 

• 7th largest undeveloped coal deposit in the world 

• 2nd largest in Indonesia 

• A projected pre-tax cash flow of over $500 million per year, for 20 years straight. 

Before Churchill entered the picture, the groundwork had already been laid by the Ridlatama Group, controlled by Indonesian businessman Andreas Rinaldi. In 2006, Churchill Mining Plc entered Indonesia by establishing PT Indonesia Coal Development (PT ICD) and partnering with Ridlatama. 

Their initial venture in Sendawar, East Kalimantan, yielded little success. Under pressure to find a viable alternative, Churchill through its consultant Nikolai Mazak—was introduced to a new opportunity in 2007. Ridlatama proposed a promising project in East Kutai involving four coal concessions, which they claimed held significant high-quality reserves and upgraded license status. Thus began the East Kutai Coal Project. 

Churchill moved quickly. Between 2007 and 2008, PT ICD signed Cooperation Agreements with the four Ridlatama entities. Under the deal, Churchill would provide financing and project management, while Ridlatama handled licensing. In return, Churchill secured 75% of future dividends. Though Churchill held no licenses directly, the layered agreements gave it effective control. The structure was a nominee arrangement commonly used to navigate foreign ownership restrictions with Ridlatama holding the permits on paper while Churchill operated behind the scenes. 

By 2008, the four Ridlatama companies, funded by Churchill, had obtained exploration licenses (IUP Eksplorasi) from the East Kutai Regent an essential step toward commercial mining. 

⚠️ When Promises Collided: The Overlapping License Scandal 

As Churchill advanced with drilling plans and feasibility studies, a deeper problem emerged one that would eventually pull the entire East Kutai project into a political and legal quagmire. Unknown to Churchill, the areas covered by Ridlatama's four coal concessions overlapped with exploration licenses that had already been granted to three other companies. The same Regent had issued exploration licenses to three other companies in 2005: 

• PT Nusantara Wahau Coal 

• PT Kaltim Nusantara Coal 

• PT Batubara Nusantara Kaltim 

These older licenses had technically expired, but renewal applications were already in process meaning the legal status of Ridlatama’s claims was anything but secure. 

And here’s the catch: according to multiple reports, the companies with overlapping claims were reportedly linked to Prabowo Subianto, then serving as a vice-presidential candidate in the 2009 Indonesian election and a strong political and former military figure. Several of his close allies and party executives in Gerindra were also reportedly involved as corporate officers in the companies holding the rival concessions. Prabowo would later become a presidential candidate in the 2014 and 2019 elections, before ultimately winning the presidency in 2024. 

On 21 April 2010, the Indonesian Ministry of Forestry sent a letter to the Regent of East Kutai, formally recommending that all four Ridlatama licenses be revoked. The letter cited three explosive findings: 

1. The Ridlatama companies had no valid forestry permits to operate on state forest land 

2. There were signs of forged documents submitted during the licensing process 

3. The Ridlatama concessions overlapped with existing mining rights previously granted to others 

Barely two weeks later, on 4 May 2010, the Regent signed decrees revoking all four IUP exploitation licenses held by Ridlatama’s companies: PT RTM, PT RTP, PT IR, and PT INP. 

Churchill and Planet were stunned. They turned to the courts in Indonesia and lost. The Administrative Tribunal in Samarinda upheld the revocations of each of the four concessions. 

Finally, the Supreme Court of Indonesia closed the door for good. 

🧐 Digging Through Documents: ICSID’s Forensic Review 

At the ICSID proceeding, the Indonesian government initially felt it was already on the back foot. From Jakarta’s perspective, the case should never have been admitted in the first place. Churchill had no direct mining licenses. It had used a nominee structure a common workaround by foreign investors to control restricted sectors, but one that violated Indonesian foreign investment rules. 

Yet somehow, the claim moved forward. 

ICSID accepted jurisdiction, and with that decision, this dispute became a full-blown international legal battle. The Indonesian government had no choice but to treat it seriously. Ministers were briefed. President Yudhoyono was kept updated. 

The core legal question remains the same: were the revocations of the four mining licenses valid under the law? 

That’s where the case became deeply technical. Expert witnesses were called to analyze the authenticity of Ridlatama’s documents, including whether the signatures of the East Kutai Regent had been forged. The stakes were enormous. 

The former Regent himself testified that he never signed the decrees granting Ridlatama’s companies the IUP exploitation licenses. Churchill challenged his credibility, pointing out that the former Regent was under investigation for corruption, and questioning whether his testimony was politically motivated. 

Still, the tribunal reviewed not just the testimony, but forensic evidence, document metadata, and government records. After years of examination, the ICSID tribunal concluded that the four licenses were indeed forged. 

Who committed the fraud? That remained unanswered. It may have been a mid-level official at East Kutai, or done under Ridlatama’s instructions to deceive Churchill. But in the eyes of the tribunal, it didn’t matter. 

Fraud had occurred. And fraud nullifies protection. No matter how much Churchill may have invested or how unaware they may have been the tribunal held that they could not benefit from rights that were obtained through falsified documents. 

In the end, Churchill lost the project and eventually decided to exit Indonesia. 

🔑 Key Takeaways from the Churchill Mining Saga 

1. In Indonesia, politics matter but paperwork matters just as much. While political connections often shape the business environment in Indonesia, the Churchill case shows that bureaucratic compliance can be even more critical. The downfall wasn’t triggered by political sabotage but by irregularities in licensing documents. When you get the paperwork right, everything else can follow. 

2. The case reflects an era of fragmented, local licensing. The events occurred in the pre-2009 decentralization era, when regional governments had vast authority to issue mining licenses. There was no central database, no standardized monitoring of overlapping concessions, and little accountability for local officials. That institutional gap created the conditions for the fraud. Since then, Indonesia has made significant strides in closing loopholes and reducing the risk of overlapping claims. Today, electronic systems track mining licenses more systematically, and central oversight has improved coordination. 

3. Foreign investors must do more than rely on contracts. As the ICSID tribunal emphasized, due diligence is the investor’s responsibility. Churchill relied on a web of nominee agreements and assumed its partners had secured valid permits. But it never verified the authenticity of the documents. In international investment law, even good faith cannot protect an investor whose rights are built on fraud. 

Source: 

• (ICSID Case No. ARB/12/14 and 12/40): Decision on Jurisdiction and Decision on Award. 

• The President's new clothes: Unravelling the mystery of Prabowo Subianto’s business interests (Gecko Project) 

• Planet Mining Pty Ltd public records 

• Churchill Mining PLC public records