The Jakarta Post reported that three iron ore plants with a combined investment of USD 470 million are slated to begin operations in 2012 with a priority of meeting surging local demand.
The Industry Ministry’s director for base metal industries Mr I Gusti Putu Suryawirawan said that construction of the plants was between 70% and 80% complete and they were due to start operating in the first and second quarters of 2012.
He added that "Our annual demand for steel has settled at around 10 million tonnes, while we can only produce 6 million tons. We expect the plants' output will help supply materials for steel production."
The plants belong to PT Meratus Jaya Iron and Steel, a JV between state steel maker PT Krakatau Steel and state mining company PT Aneka Tambang; PT Mandan Steel in collaboration with Chinese Zhengzhou Yong Tong Special Steel Corporation and PT Indoferro, a subsidiary of Growth Steel Group.
Mr Putu said that the approximately USD 120 million Meratus plant, located in Tanah Bumbu regency, South Kalimantan, would produce some 315,000 tonnes of sponge iron for steelmaking once it began operations in March or April. He said the output would supply Krakatau Steel's plant in Cilegon, Banten, which hitherto imported the materials from Brazil.
The Mandan plant, also in Tanah Bumbu and costing approximately USD 220 million, is slated to commence operating in the first half of next year at the latest, Mr Putu said, it would yield around 1 million tonnes of billet iron per annum.
He added that "The billet iron is to make components of train wheels and ball bearings. The output will be allocated according to market needs but it will prioritize the domestic market wherever possible."
The Indoferro plant in Cilegon, with an investment of USD 130 million, would produce 500,000 tonnes of pig iron for Growth's plant in Medan, North Sumatra. The plant was set to open in May 2011. Higher domestic demand for steel, a key material in the automotive and construction sectors, has led to increased investment in the industry.
Indonesia’s largest steel maker Krakatau Steel is teaming up with the world’s third-largest steel producer, South Korea's POSCO, to build a USD 6 billion steel plant in Cilegon to produce 3 million tonnes of steel plate per annum by 2014.
Krakatau Steel also plans to spend an estimated IDR 5.92 trillion building a blast furnace in Cilegon in 2012, it will produce between 1.2 and 1.5 million tonnes of steel slabs starting early 2014.
PT IndoJapan Steel Center, a JV between Nippon Steel Trading Co Ltd and Krakatau Steel and two other local firms, is constructing a plant in Karawang in West Java. The plant is designed to produce 120,000 tonnes of sheet steel annually for automotive parts and is due to start operating in January 2013.
Meanwhile Jogja Magasa Iron in cooperation with Australia's Indo Mines is expected to set up a plant with a possible investment of AUD 600 million to produce 500,000 tonnes of pig iron by 2014.
(Sourced from www.thejakartapost.com)
