Artha Metal, China Steel to invest $6b in steel project

Indonesia?s PT Artha Metal Sinergi, a subsidiary of the well-diversified Artha Graha Group, signed on Tuesday an MoU with Taiwan-based Chi na Steel Corporation to develop an integrated steel production facility in Java, reports said Thursday.

As has been previously reported, the two companies will develop the project in a number of phases, with the first target to develop manufacturing facility to produce steel products for the construction sector to meet growing demand in Indonesia as Artha Metal aims to become a major player in the sector.

Artha Metal CEO Felix Effendi said in a press statement that the two firms currently are still conducting feasibility study for the project, which is expected to be completed end of this year. No further details were provided including on the planned size of investment.

Kontan, however, said that based on information from the Investment Coordinating Board (BKPM), that investment in the first phase is estimated at US$500 million to develop a steel plant with annual production capacity of 1 million tons. Construction of the facility is expected to start mid next year.

Meanwhile, Minister of Industry Saleh Husin said that the two firms will gradually increase their investment up to US$6 billion through to 2020 to enter the upstream part and expand the downstream part of the industry to 5 million tons per annum, and then eventually double it to 10 million tons per annum. ?Total investment can reach US$6 billion for the three-phase project,? he said. (*)