Growth Steel Group to start construction of NPI smelter in February

Despite new uncertainty triggered by the government?s latest intention to relax the planned export ban on mineral ores, Growth Steel Group is determined to press ahead with the construction of its second nickel pig iron (NPI) smelter in the country, Kontan reported Thursday.

The paper quoted as saying Growth Steel Group?s Head of Business Development, Jonatan Handojo that the group has allocated US$160 million for the construction of the NPI smelter in Cilegon, Banten.

Through subsidiary PT Indoferro, the group plans to start construction in February 2014, in the hope that production could start in the first semester of 2015, which would double the annual NPI production of the group as its first NPI smelter facility, located in the same area, has started production since August 2012.

Jonatan said that $145 million of the planned investment will be financed via loans from a syndication of four banks including CIMB Niaga, Bank UOB Indonesia, Indonesia Exim Bank, and Bank Ekonomi. The remaining $15 million will come from equity.

The paper said that Indoferro has appointed a company from China to supply the machinery for the smelter, while construction will be carried out by an Indonesian company.

Growth Steel obtains raw material for its NPI smelter from various mines across the country. The group exports its output to Malaysia, Taiwan, South Africa, Turkey, and Spain. (*)