Indo Mines reports progress at Yogyakarta pig iron project

By Ruli Setiawan

ASX-listed Indo Mines Limited said it has continued with its strategy of developing the pig iron project in Kulon Progo, Yogyakarta.

The company said in a quarterly report released Wednesday that approval of the re-submitted Feasibility Study for the project was granted on 14 March 2014 by the Ministry of Energy and Mineral Resources. This approval enables the plant location to be moved to the western end of the Contract of Work area.

All land acquisition activities by PT Jogja Magasa Iron (JMI), a joint venture firm which owns 70 percent of the iron project, have now been completed with around 170 hectares of land having been acquired for the project, Indo Mines said. Most recently, JMI has reached agreement for acquisition of the access road through to the site area.

The company has been reviewing its options in relation to the phased construction of a concentrate plant ahead of pig iron production. ?In the context of Government Regulation 7/2012 and the export tax provisions announced on 12 January 2014, there is very limited opportunity for JMI to profitably implement concentrate production through export nor is there sufficient demand domestically to justify the early capital required to establish these facilities,? the report said.

?Therefore, studies are now focused on the production of pig iron and testwork is being undertaken to finalize the pig iron process design. These studies will be a precursor to any bankable feasibility study scope of work required to take the project through to development,? the company said.

Editing by Reiner Simanjuntak