Krakatau Steel eyeing iron ore mining
Thursday, September 8 2005 - 07:06 AM WIB
"In line with Krakatau Steel`s vision to develop into a world integrated steel producer by 2013, we plan to enter iron ore mining," the company`s president director Daenulhay said here on Wednesday.
Krakatau Steel plans to establish cooperation with Chinese companies Chuan Wei Group Co Ltd, Sinchuan Chuan Wei Group Co Ltd and a local mining concessionaire PT Sumbergas Sakti Prima, he said.
He said more than US$1 billion would be invested in the iron ore mining industry in Kalimantan, including the building of infrastructure and a coal-fired power plant.
He said the industry to be built in Sampit was expected to have an initial production capacity of 2.5 million tons which would be stepped up in stages every year.
Financial director Fazwar Bujang said his company would possibly take 10 per cent stake in the project.
"We will not take much. We follow what Nippon Steel has done, namely taking two per cent of the stake in the iron ore mining industry in Brazil, but is assured of more than 50 per cent of the industry`s production. The important thing is that our supply is guaranteed," he said.
The memorandum of understanding for the cooperation was signed at the end of August in Beijing in the presence of Vice President Yusuf Kalla who was on a visit to China.
Industry Minister Andung A Nitimihardja, who was one of the signatories of the MoU, said he would monitor the implementation of the MoU which was expected to be started in the next two to three months.
"The project is scheduled for completion in 24 to 30 months, so that in 2008 the industry would already be supplying iron ore to PT Krakatau Steel," he said.
Andung said with the development of the iron ore mining industry, Indonesia would be able to save about US$125 million in foreign exchange.(*)