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AKARTA: Wuhan Iron and Steel Corp. of China and its local partner steel producer PT Gunung Garuda plans to establish steel plants in Medan, North Sumatra, and Kotabaru, South Kalimantan, with a total investment of up to US$3 billion in five years.

Gunung Garuda representative Djamaluddin Tanoto said in Jakarta on Thursday that the firms would start plant construction in Medan in 2013 and he expected the operation to commence in 2014.

“We expect the first plant to produce 500,000 tons of steel in the first year. The output will then be increased to reach 1 million tons,” he said after meeting Industry Minister MS Hidayat at the ministry’s office.

He added that the plant would produce, among other things, specialty steel for automobiles and construction, with 50 percent allocated for the domestic market and exports.