15 miners form consortium to build steel plant in East Java

As many as 15 iron ore miners have agreed to form a consortium to build a steel plant with investment of about Rp 946.74 billion (US$100 million) in East Java, Koran Tempo reported on Tuesday.

The consortium PT Indo Modern Mining Sejahtera plans to build the steel plant in Probolinggo or Lumajang regency, East Java. The plant is expected to be as large as PT Krakatau Steel?s steel plant in Cilegon, Banten.

Agus Amir, the spokesman for the consortium said that Probolinggo was chosen to become one of the location options because it is located near the Paiton power plant, while Lumajang is chosen because it is located near iron ore mines. The consortium is still conducting a feasibility study on the construction of the steel plant.

Agus said that the steel plant would be supported by sufficient supply of iron ores. The consortium members operate iron ore mines of 8,000 hectares while Indo Modern has its own concession covering an area of 8,549 hectares along the coastal area of Lumajang.

Nurul Hadi, the head of the economic department of the Lumajang regency administration, said the iron ores mines in the regency covered about 60,000 hectares, which have iron content of between 30 and 60 percent. (*)