Krakatau Steel to approach strategic partners for S. Kalimantan project

State-owned steel company PT Krakatau Steel (KS) said that it will adopt business to business (b to b) approach in regards to the steel plant construction project in South Kalimantan because its effort to find strategic partners for the project through a tender has failed, Republika reported Tuesday.

The company?s president director Daenulhay said that 12 bidders in the tender for the project did not meet the tender requirements, which include conducting a due diligence and ownership of a mining authority permit.

?Because none of the bidders have met the bidding requirements, we?ve decided to stop the tender process and we will, instead, adopt a b to b approach to determine companies which will become our strategic partners,? said Daenulhay in Jakarta, Monday.

Bidders for the project include Essar and Ispat International from India and Matellurgical China Construction (MCC), Sino Steel from China and TransAsia from Ukraine

Despite the failed tender, Danulhay is optimistic that the steel plant construction project in South Kalimantan will run as scheduled. ?Our target is that the plant will start operation in 2009,? he said.

The steel plant construction project cost is estimated to reach around US$450 million. The plant will have an output capacity of 1 million tons of steel ore per year and to produce pig iron of 300,000 tons a year

Meanwhile, director general for metal, machines and textiles at the trade ministry Anshari Bukhari said that iron ore reserves in South Kalimantan is estimated to reach 760 million tons or about 70 percent of the total national reserves of 1.1 billion tons.

He added the a feasibility study on five regencies in South Kalimantan - Tanah Lumbu, Tanah Laut, Kota Baru, Tabalong and Balangan ? is underway to determine the potential locations for the plant. (*)