26/07/2008 (Mongabay.com) - Commodity producers are eyeing one of the world's last relatively untouched tracts of rainforest for development, reports the Wall Street Journal.

Asian comapnies are lining up to develop pulp-and-paper mills and oil palm plantations in Merauke, Papua, "a California-size land of virgin forests and pristine rivers, with a population of 2.5 million," writes Tom Wright for Wall Street Journal. U.S.-based International Paper is said to be taking an exploratory look at establishing a milti-billion dollar plantation in the area.

While the Papua Governor Barnabas Suebu agreed last year to ban logging of the province's rainforests in return for carbon-credits from investors, Wright writes that local investors are pushing for agricultural development.

"The governor of Papua pledged in December at the United Nations climate-change meeting in Bali to protect the province's forests in return for carbon-credit financing from global investors. But these projects are likely to take years to come to fruition; meanwhile paper, palm-oil and other agricultural investors are already staking out Merauke," he writes.

"Record commodity prices and lack of available land elsewhere are driving investors to regions such as Papua. Environmentalists fear the area's forests will be destroyed much like those on Sumatra and Borneo islands, where rare elephants, tigers and orangutan are threatened with extinction."

Papua province is located on the island of New Guinea. It is bordered by the independent country of Papua New Guinea and the sister province of West Papua, which consists of the Bird's Head Peninsula. The two Indonesian provinces were formerly known as Irian Jaya.