Indo Mines, partner to spend $600m in Jogjakarta pig iron project

Australian company Indo Mines Limited and its Indonesian partner PT.Jogja Magasa Mining will spend US$600 million to develop pig iron plant complex in Jogjakarta, Central Java.

Chairman Darryl Harris told a parliamentary hearing in Jakarta on Thursday that the plant would start production in 2011 with initial production of 1 million tonnes 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 area and to export market.

The company and partner is currently applying to upgrade its mining license to Contract of Work (CoW) from Mining License. The mine is estimated to hold 33 million tonnes of iron ore reserves.

Director General of Mines Simon Sembiring said the JV company that runs the mine would list shares at the Jakarta Stock Exchange three years after production.

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