Mr MS Hidayat industry minister of Indonesia kicked off construction of a USD 200 million integrated blast furnace by a joint venture company in Medan, North Sumatra.

Construction of the steel mill is being carried out by PT Gunung Gahapi Nisco Indonesia, a joint venture between Indonesian steel maker PT Gunung Gahapi Sakti and China’s Nanjing Iron and Steel Company.

The first phase of construction is estimated to cost USD 100 million before it moves forward to the next step of development costing another USD 100 million.

The first phase is expected to be completed next year and the second phase by 2017. The steel mill, to be built on 40 hectares, will employ 1,200 workers. It will start commercial operations next year and produce 500,000 tonnes of concrete reinforcing steel and wire rod a year in its initial phase. Its capacity will be upgraded by another 500,000 tonnes in the second phase.

Mr Hidayat said that it was a wise decision by Gahapi and Nanjing to produce wire rod and concrete-reinforcing steel to supply local makers of prestressed concrete steel, steel wire ropes, cable stayed, steel cord, nuts and bolts and nails. This cooperation is expected to help improve the quality of domestic wire rod that still cannot meet certain standards needed to produce, for example, wire rod high carbon and alloy steel.