Cakra Mineral may cancel pig iron smelter project

By Thomas Sembiring

IDX-listed PT Cakra Mineral Tbk may have to cancel a planned pig iron smelter in Langkat, North Sumatra, amid differences with existing partner Hong Kong-based Z & N International Co. Ltd.

"There's big possibility we'll cancel it," said Cakra Director Argo Trinandityo to Petromindo.com late last week.

Cakra and Z&N last year set up a joint venture firm called PT Cakra Smelter Indonesia (CSI) to develop the estimated US$35 million pig iron smelter.

But Agro said the partner later wanted to expand the project further downstream including steel production, which is opposed by Cakra as it would require much greater funding, and may risk Cakra's 51 percent majority stake in CSI to be diluted.

Agro said that there's an alternative for the company to look for a new partner to continue the project.

Editing by Reiner Simanjuntak