POSCO to Build Plate Mill at Indonesian Integrated Steel Works

POSCO decided to establish plate steel mill with 1.5 million tonnes of annual output capacity as a part of first phase of joint integrated steel project with Indonesian Krakatau Steel for US$ 2.7 billion. POSCO tries to develop Asian market mainly in Southeast Asia through the 3 million tonnes of steel making project, which is POSCO’s first overseas integrated steel works and largest foreign investment in Indonesia.

The joint venture, PT Krakatau POSCO, of which POSCO controls 70% with 30% share by Krakatau Steel, started the ground breaking works on October 28. The project will complete the first phase by end of 2013 after the facility building works starts in as early as in late 2011 following land preparation works for the site with 400 hectares of area.

The first phase of the plant with one blast furnace and annul 3 million tonnes of raw steel output capacity will sell remaining 1.5 million tonnes as slab. Krakatau Steel uses 1 million tonnes of slab for the operation while the new plant sells 500,000 tonnes of slab for third parties in and out of Indonesia.

The firm adds 3 million tonnes of capacity as the second phase without detailed plan. POSCO eyes new iron making process, FINEX for the upstream of the second phase. The second phase is launched after the first phase plant establishes normal operation.

PT Krakatau POSCO’s integrated steel works are constructed next to Krakatau Steel’s site in Cilegon, 100 kilometers west of Jakarta. The new project minimizes the initial investment using infrastructures held by Krakatau Steel and expects early start of the operation.

Indonesia is estimated to have around 2.2 billion tonnes iron ore and 93.4 billion tonnes coal. POSCO plans to co-develop the resources with Krakatau Steel to enhance the competitiveness.