Wuhan Iron and Steel Corporation of China plans to invest up to USD 5 billion this year to build an integrated mill in Indonesia. The firm has carried out a feasibility study for the project and is now assessing the location to set up the mill.

Mr MS Hidayat industry minister of China said that “They are seeking a location that is close to a seaport with a specific depth, sufficient electricity supply and supporting infrastructure. The development of the integrated iron and steel mill by Wuhan will run along with the establishment of a 1,500 hectare industrial park.

Mr Hidayat said that he recommended East Java as a potential site for the mill due to its availability of necessary infrastructure and relatively easy access to raw material in Kalimantan, north of East Java.

Mr Hidayat said that “Wuhan would likely team up this time with Indonesian conglomerate Sinar Mas Group to build the steel mill. The local business group focuses primarily on agriculture, pulp and paper, property and finance.”

He said that it would take a few years to gradually construct the mill, which would produce up to 5 million tonnes of iron and steel products for various applications, including for the automotive and shipbuilding industries. The products will primarily be sold in the domestic market, thereby allowing us to reduce imports.”

In 2011, Wuhan had planned to set up steel mills in Medan, North Sumatra, and in Kotabaru, South Kalimantan, in collaboration with domestic steelmaker PT Gunung Garuda with a total investment of up to USD 3 billion over five years. The mills were designed to annually produce up to 1 million tonnes of steel. However, the plan collapsed for unknown reasons.