New Delhi: Jindal Stainless and Indonesian mining major Antam today signed an agreement to jointly develop a nickel smelting and stainless steel plant with an investment of about $700 million ( Rs 841.48 crore) in South East Sulwasi (Indonesia).
“Indonesia’s Antam will have 55% interest in the project and Jindal will own 45% share and the total investment is at about $700 million, which will be funded with an optimum mix of 70:30% debt-equity ratio,” Jindal Stainless Director N C Mathur told PTI.
Of the total equity component, Jindal Stainless would pump in $90 million while $120 million would be provided by Antam.
Antam, in which the Indonesian government has a majority stake has earned a net profit of about $550 million last year.
He said, setting up of the plant would be a “win-win situation” as it is the first of its kind to be set up in Indonesia and would be located near nickel mines and a port.
Construction of the project would begin early 2009 and is expected to be commissioned by middle of 2011.
Mathur said, the joint venture facility would have an initial capacity of around 20,000 tons per annum of contained nickel and around 250,000 tpa for stainless steel.
Jindal would contribute its stainless steel processing and marketing expertise and global network for sales and distribution of the joint venture products. While Antam would contribute to mining and nickel processing expertise and local knowledge.
A joint team of both the companies would be formed to establish the JV firm, which is likely to be called Antam Jindal Stainless Indonesia, Mathur said.
The facility would include nickel smelting and stainless steel, coal-based captive power plant, water treatment plant, sea-port and other necessary infrastructure.
Jindal, who already has a stainless steel cold rolling complex in Indonesia, the development of the project is part of its strategy to become leading global player in stainless steel industry.
This JV is part of Antam’s business strategy of product diversification to improve shareholders’ value.