August 20, 2008

New Ore Plants to Be Built in Indonesia

New ore plants to be built in Indonesia JAKARTA, Aug. 19 (Xinhua) -- Three new iron ore plants will be built in Indonesia's South Kalimantan province in a bid to meet rising global demand for the product, the Jakarta Post reported here Tuesday.

The plants will be built by Meratus Jaya inc., Semeru Surya inc. , Steel and Mandan Steel inc. with investments of 300 million U.S. dollars, Director of the Indonesian Industrial Ministry I Gusti Putu Suryawirawan said.

"Meratus and Mandan will build a 60-million-U.S. dollar and a 220- million-U.S. dollar plant in Tanah Bumbu regency respectively, while Semeru will build a 40-million-U.S. dollar plant in Tanah Laut regency, all in South Kalimantan," he told the post.

Meratus is a joint venture company, co-owned by state- controlled mining firm PT Aneka Tambang and state-owned steel producer Krakatau Steel inc., while Semeru is a subsidiary of steel producer Gunung Garuda Group.

Mandan Steel is wholly owned by a Hong Kong steel manufacturer which imports iron ore from Indonesia, and will be the only foreign company in the Indonesian iron ore processing industry.

The director said Meratus and Semeru would respectively produce 315,000 and 300,000 tons of sponge iron annually, while Mandan Steel would yield 1 million tons of billet iron each year.

Meratus is scheduled to start construction in November, he said.

"Mandan will have to wait for (processing plant) designs, which are being formulated in its home country, before beginning construction -- likely to take place in February 2009," said Suryawirawan.

Indonesia produces 2 million tons ore per year.

Iron prices rose by 50 percent in the global market in the first semester this year, from a year earlier.

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