KS, Antam to sign S. Kalimantan iron ore JV agreement

State-owned steel maker PT Krakatau Steel (KS) and state miner PT Aneka Tambang (Antam) Tbk will sign a joint venture agreement on the construction of an iron ore processing plant in Batulicin, South Kalimantan in November this year, Kontan daily reported Saturday.

KS?s newly appointed president director Fazwar Bujang said in Jakarta the construction of the plant that processes iron ores into sponge iron would need an investment of between Rp 500 billion and Rp 600 billion.

According to Fazwar, Bank Mandiri is ready to provide 70 percent of the needed investment. ?The remainder of 30 percent will come from internal sources,? he said.

Under the joint agreement, the construction of the iron ore processing plant with a production capacity of 300,000 tons per year of sponge iron will commence in June 2008. It will take some 18 months to complete. ?Thus it will start production in 2010 at the latest,? he said.

On the supply of raw material, the joint venture plant will cooperate with iron ore suppliers that hold a mining authority (KP) in South Kalimantan.

He said that a feasibility study on the supply of iron ore has been conducted, with the result confirming the availability of iron ore stock in South Kalimantan natural resources that can be used for 15 years. (*)