Indonesia's largest steel maker PT Krakatau Steel (KS) has decided to increase the production capacity of the blast furnace presently under construction.

Krakatau said it has signed a deal with contractors — a consortium of a group of Chinese companies Capital Engineering and Research Incorporation Limited (MCC-CERI) and KS’s subsidiary PT Krakatau Engineering — to increase the production capacity of the blast furnace from 1.2Mt/y to 1.4Mt/y which will require the output of the coke oven plant to be increased from 500kt/y to 550kt/y.

Increasing the production capacity of the coke oven plant will increase costs by about US$14M making the project total $542.6Mt, including a sinter line and ancilliary equipment.

Increasing coke oven capacity will make the company self sufficient in its coke needs.

Krakatau has set aside $601M as the total investment for the blast furnace complex, which is being built on 60 hectares in the company’s industrial compound in Cilegon, Banten.

Operations are expected to commence in the second half of 2015.

The blast furnace project will be financed partly by syndicated loans from domestic banks and Chinese banks backed by export credit agencies.

The company is working on several other projects requiring large investments, including the development of integrated steel facilities ‘PT Krakatau Posco’ a joint venture with South Korean Pohang Iron and Steel Company (Posco).

The steel plant’s first phase of development, requires $3bn investment, and is scheduled to be completed this December.

Presently KS relies on the production of Direct Reduced Iron for its steelmaking needs.

Source: Daily ‘The Jakarta Post’, Jakarta; 6 Aug 2013