Indo Mines, partner form JV to develop Jogjakarta ironsands project

Australian mining firm Indo Mines Limited and its Indonesian partner PT Jogja Magasa Mining have got approval from the Minister of Energy and Mineral Resources to form a foreign investment joint venture (JV) firm, PT Jogja Magasa Iron (JMI).

Indo Mines Limited and its partner will develop ironsands project complex in Jogjakarta. The company and partner are currently applying to upgrade its mining license to Contract of Work (CoW) from Mining Contract (KP). The mine is estimated to hold 33 million tons of iron ore reserves.

Indo Mines Managing Director Phil Welten said on Tuesday statement: ?this is another significant step in the process of securing a Contract of Works between the Government of the Republic of Indonesia and JMI (once registered)?.

Indo Mines also said the CoW application is progressing with Indonesian government.

In November 2007, Chairman Darryl Harris told a parliamentary hearing in Jakarta that the pig iron plant complex, which will spend US$600 million, would start production in 2011 with initial production of 1 million tons of pig iron per year.

Harris said the investment would include plant, road and railway, port facilities and a 350-MW coal-fired power plant.

Pig iron produced would be sold to steel maker PT.Krakatau Steel, local customers in the surrounding areas and to export market.

Indo Mines holds 70 percent stake in the project, with Jogja Magasa holding the balance. (denny)