Stainless steel maker Jindal Stainless has signed a joint venture agreement with Indonesia-based PT Antam Tbk to develop a nickel smelting and stainless steel facility in North Konawe, South East Sulawesi at an investment of Rs 3000 crore. As part of the agreement, Antam will have a 55 per cent share in the project while Jindal will own 45 per cent.
Initially, the project is planned to have a capacity of around 20,000 tonnes per annum (tpa) of contained nickel in ferronickel and around 250,000 tpa for stainless steel, mainly the high quality 300 series. Based on a proposed market survey to be commissioned soon, the final end product may be stainless steel slabs.
Antam will contribute its mining and nickel processing expertise as well as its local knowledge and experience while Jindal will contribute its stainless steel processing and marketing expertise as well as its global marketing network for the sales and distribution of the joint venture's products.
The integrated project shall process nickel ore from Antam's Mandiodo concession, which has an average nickel grade of about 1.5 per cent. In addition to nickel smelting and stainless steel, the facility will also include its own coal-based captive power plant, water treatment plant, seaport and other necessary infrastructure including residential facilities for its employees.
This project may be the first venture in the world where a stainless steel processing mill is located together with a nickel plant and mine. This arrangement may result into very significant cost savings and shall make the venture highly competitive.
Total investment is estimated at about US$ 700 million which will be funded with an optimum mix of debt and equity.
A joint team between the companies is being formed to establish the joint venture company which may be called as PT Antam Jindal Stainless Indonesia. Construction activities of the complex may start from early of 2009. The complex is expected to be commissioned by mid-2011.
Source: Business Standard
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