Bali volcano starts ERUPTING as smoke and ash billows into air

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Eruptions could result in ash clouds that could "severely disrupt air travel", it said.

The plume of ash has yet to affect air traffic, as Bali's global airport remained open and flights were operating as scheduled.

Indonesian authorities downgraded its alert status to level 3 from highest alert of level 4 following indicators that showed no imminent danger from volcanic activities in the volcano.

According to official estimates, the holiday island of Bali has lost at least $US110m in tourism and productivity while locals were moved to shelters. An eruption in 1963 killed 1,549 people.

"You should also be ready to evacuate at short notice".

Indonesia is home to around 130 volcanoes due to its position on the "Ring of Fire", a belt of tectonic plate boundaries circling the Pacific Ocean where frequent seismic activity occurs.

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The mount Agung, which has a little more than 3000 meters above sea level and is situated approximately 75 kilometres of the main tourist destinations of Kuta and Seminyak, growls since the month of August and could erupt for the first time since 1963.

A spokesman for Indonesia's National Disaster Mitigation agency, said via a text message that there had been a "phreatic eruption" late on Tuesday with black smoke reaching 700 meters (2,300 ft), followed by falling ash, gravel and sand. An escalation in tremors can indicate magma is rising inside the mountain.

In 2010 Mount Merapi, considered one of the most active and unsafe volcanoes in the world, erupted and killed more than 300 people and forced 280,000 people to flee.

They told locals to remain calm and not to panic.

Safety authorities warned people to stay away from a 6 to 7.5-km exclusion zone surrounding the volcano.

It is unknown how long the volcano may erupt for and it is even possible that the activity is the last that will be seen for some time.