Indonesia says ArcelorMittal seeking approval to build 2 steel plants on Java
Thomson Financial News
JAKARTA (Thomson Financial) - ArcelorMittal is seeking license from the Indonesian government to build two multi-billion-dollar steel plants in Indonesia, the head of Indonesia’s National Investment Coordinating Board (BKPM) said Wednesday.
‘ArcellorMittal executives came to my office last week. They said they will go ahead and invest in this country, whether the privatization of Krakatau Steel happens or not,’ BKPM chief Muhammad Lutfi said at a luncheon with foreign journalists here.
‘They (ArcellorMittal) asked for a license to build two (steel) plants, one in Banten in the western part of Java and one in the East Java town of Pasuruan,’ Lutfi said.
ArcelorMittal had earlier offered to buy a 49 percent stake in state-owned steelmaker PT Krakatau Steel if the government were to proceed with a plan to divest the company through a strategic sale.
The plan for a strategic sale, however, sparked widespread protests from the Krakatau Steel workers’ union, supported by some quarters of society. They called on the government to privatize Krakatau Steel through an initial public offering (IPO).
ArcelorMittal is one of several companies that have signified interest in buying into Krakatau Steel.
Australia’s BlueScope Steel and Tata Steel of India are also reportedly in the running for the government’s stake in the company.
State-owned enterprises minister Sofyan Djalil said recently that the government may opt to sell its stake in Krakatau Steel through an IPO.
BHP-Antam nickel project
Lutfi also said his office will ensure that the nickel project on an eastern Indonesian island that is to be developed by Australia’s BHP Billiton (nyse: BBL - news - people ) and Aneka Tambang will proceed as planned.
He said the 50-50 joint venture involves investments of around $4 billion and will include a mine on environmentally sensitive Gag Island off the western tip of Papua.
‘We will do it responsibly and my board will do whatever it can to make sure that (the joint venture) materialises,’ Lufti said.
‘I understand that Gag Island is environmentally sensitive and that’s why we have to think about developing the smelting and refining not on Gag Island but on the Halmahera side,’ he said, referring to a large island in nearby North Maluka province.
roffie.kurniawan@thomsonreuters.com
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– by Roffie Kurniawan –
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Add comment June 26th, 2008