July 05, 2008

Jindal Stainless to set up JV with PT Antam

It is reported that Jindal Stainless and PT Antam TBK has signed a 45:55 JV agreement to develop a nickel smelting and stainless steel facility in North Konawe.

Initially, the project will have a capacity of around 20,000 tonnes per annum of contained nickel in ferronickel and around 250,000 tonnes per annum of stainless steel, mainly the high quality 300 series.

A joint team between the companies is getting formed to establish the JV which may be called PT Antam Jindal Stainless Indonesia. Construction activities of the complex may start from early of 2009. The complex is expected to be commissioned by middle of 2011. Total investment is estimated at about USD 700mn which will be funded with an optimum mix of debt and equity.

Jindal Stainless said that based on a proposed market survey to be commissioned soon, the final end product may be stainless steel slabs or possibly stainless steel long products. Antam will contribute its mining and nickel processing expertise as well as its local knowledge and experience while Jindal Stainless will contribute its stainless steel processing and marketing expertise as well as its global marketing network.

The integrated project will process nickel ore from Antam's Mandiodo concession, which has an average nickel grade of about 1.5%. In addition, to nickel smelting and stainless steel, the facility will also include its own coal based captive power plant, water treatment plant, seaport and other necessary infrastructure, including residential facilities for its employees.

This project may be the first time any where in the world where a stainless steel processing mill is located together with a nickel plant and mine. This arrangement may result in very significant cost savings and will make the venture highly competitive.