Indonesian geologists have discovered evidence that indicates that the archipelago is formed from a volcanic sediment, and its land originally erupting as a result of major geological activity.
It should be evidence that indicates or evidence to indicate.
The land has already been erupted so the correct usage is erupted.
Also the newly found evidence suggests that the archipelago is formed. "is formed" should be used.
A.
that indicates that the archipelago
is formed from a volcanic sediment and its land originally
erupting
"that indicates that" structure is redundant and that land has already been erupted, so the correct usage is erupted.
B.
that has indicated the archipelago
formed from a volcanic sediment, its land originally
eruptingC.
indicating that the archipelago
had formed from a volcanic sediment with its land originally
eruptedD.
to indicate that the archipelago
had formed from a volcanic sediment and its land originally
eruptedE.
to indicate that the archipelago
is formed from a volcanic sediment and that its land originally
erupted
"to indicate" is used, "is formed" is used and "erupted" is used. So E is the correct answer.