Morowali Park to produce carbon steel

Posted on 19 September 2017

Source: The Jakarta Post

Industrial park developer PT Indonesia Morowali Industrial Park (IMIP) plans to build a carbon steel factory next year near its existing stainless-steel plants and nickel smelters in the 2,000-hectare park in a bid to reduce the import of the commodity.

IMIP managing director Hamid Mina said PT Dexin Steel Indonesia, a joint venture of IMIP, Delong Steel Singapore Projects Pte. Ltd. and Shanghai Decent, would build the factory. The factory is estimated to cost US$960 million and take one to two years to construct.

“We only need to wait for various permits issued by the BKPM [Investment Coordinating Board] to start the construction early next year,” he told reporters on the sidelines ofnIMIP’s inauguration ceremony of Morowali Metal Industry Polytechnic, where he welcomed first-year metal engineering students.

Indonesia imports 6 million tons of steel, mostly carbon steel, out of the annual demand of 14 million tons steel, data shows.

IMIP technical advisor I Wayan Prenata said that the type of steel mostly sought in the Indonesian market was not stainless steel but carbon steel, of which state firm PT Krakatau Steel, located in Cilegon, Banten, is the bigger producer.

“So if the plan is realized, Morowali will be the second biggest steel comples after Cilegon,” he said.

The government and the firm claim that IMIP is the world’s biggest integrated stainless steel complex in the world that processes soil, nicket and all the raw material of stainless steel,” Hamid said.

IMIP previously stated it aimed to finish constructing there stainless-steel slab factories with a combined capacity of 3 million tons by April next year. One factory has been running this year and is set to produce 500,000 tons of stainless steel slabs by year-end.

Once all the slab plants are done, the firm will run its hotrolled coil (HRC) plant – processing the slab into thinner plates – under its full capacity of 3.5 million tons. Next, to further process HRC to cold-rolled coil (CRC), or thinner and shinier plats, IMIP requires a CRC plant, which the firm is currently building, with a capacity of 500,000 tons.

“The CRC products can then be processed into steel for automotive, health equipment and other uses,” said IMIP CEO Alexander Barus.

The giant developer sources all of its nickel from Sulawesi and its surrounding areas while importing all of its manganese, chrome and silicone from South Africa as the three raw materials are not developed here.

Aside from processing nickel into steel, the firm also produces nickel and exports it to China. It aims to increase nickel production by 46.3 percent to 120,000 tons this year. The firm has secured a mining permit on 47,000 hectares of land. It has exploited some of the land and recovered 160 hectares of it to its former nature.

To support the expansions, the firm plans to build a 2x350 megawatt (MW) coal-based power plant (PLTU) worth US$$650 million, adding to its six PLTUs with a combined capacity of 1,130 MW.

With the vast business – worth at least $2.9 billion – the giant developer, comprising local and Chinese investors, is building an airport with an 1,800-meter runway, scheduled to operate next year. 

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