An Australian facing deportation after being accused of mining for gold in Indonesia claims "corrupt" authorities are trying to save face over their bungled attempts to stand over him and a co-worker.
Speaking from immigration detention at Mataram on the island of Lombok, Mick Pedlow on Tuesday afternoon denied the charge against him.
He says he and friend Richard Peter Monaghan were on the island setting up a water drilling operation to service a number of building developments, worth about $100 million.
Mr Pedlow, whose wife and five-month-old baby live in Jakarta, has lived in Indonesia for 13 years.
"We were on private land owned by my wife and we'd been requested by the local arm of the military to use their services for supply of labour, the supply of building materials etc," he told AAP.
They declined the military's offer and instead went to local village chiefs looking for workers and suppliers.
"The local army got their nose out of joint and called in the intel division and concocted this story about visa irregularities," Mr Pedlow said.
On January 5, the army rolled into their camp and arrested the men.
But when they were handed to immigration by the army, the confected story "blew out of control," added Mr Pedlow, who was stunned at the levels of "corruption" on the island.
"Now immigration are left holding the baby and trying to cover their arse for reporting that, first, we had a military base, then it was a gold mining operation."
"Finally, all they're left with is a visa irregularity which they're trying to get us deported on, to shut us up and get the story squashed so they don't get egg on their faces.
"It's a big Indonesian thing about losing face and they just can't suffer that so the best way is to get us deported."
Mr Pedlow said the Department of Foreign Affairs and Trade had been in contact with him.
Comment is being sought from Indonesian immigration authorities.
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