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everal Chinese firms plan to invest up to US$5 billion to develop an industrial park in Bantaeng regency, South Sulawesi, which is slated to become Indonesia'€™s first integrated iron-and-steel industrial park.

The park will be home to eight smelters that will produce nickel pig iron and ferronickel, ingredients in stainless steel production, according to the Industry Ministry'€™s director general for manufacturing-based industry Harjanto.

The investors in the smelting plants include China'€™s major nickel pig iron producer Xinhai Technology and Mex International, which will spend $1 billion and $300 million respectively. Miners such as Beijing 21st Century Resources Investment Co. and Asia Pacific Iron Corporation, will produce iron concentrate and nickel ore in the area.

The park would occupy a site of around 3,000 hectares, equal to 8 percent of the regency'€™s total area, Harjanto said.

'€œEconomic activities in the park, which is expected to contribute 80 percent to the regency'€™s gross domestic product, will help raise the per capita income of the local population to around $2,000 from $1,500 at present,'€ he told reporters at his office.

Local residents currently depend heavily on agriculture and fishing to earn their living.

A dozen other Chinese companies will also be involved in the development of supporting infrastructure facilities for the industrial park.

They include the China Harbour Group, a state-owned Chinese firm focusing on harbor design, building and operations.

The group, which previously took part in the construction of Tanjung Priok Port in Jakarta and the Surabaya-Madura (Suramadu) Bridge in East Java, will spend $1 billion building an integrated port at the park.

Another firm is the China Shenhua Guohua Power Group, which aims to build a 2x300 megawatt-power plant worth $1 billion. To further boost the region'€™s economy, a 120-kilometer toll road connecting Bantaeng and South Sulawesi'€™s capital Makassar, would also be constructed, Harjanto said.

A new city covering 100 hectares would also be established to support the economic activities in the region, he added.

The establishment of the industrial park follows the ban on unprocessed mineral exports imposed by Indonesia, one of the key suppliers of commodities like nickel and bauxite, in mid-January.

Since the ban on ore exports, the global nickel industry has been rocked by surging prices, with prices rising by as much as 56 percent.

A number of mining giants have expressed their commitment to building processing facilities locally as a result of the policy.

The development of domestic nickel ore-processing facilities will create 105-fold added value in terms of the price of the unprocessed raw material, according to a study by the Industry Ministry.

Vince Gowan, the deputy chairman for productivity improvement and ICT at the Indonesian Chamber of Commerce and Industry (Kadin), said that the construction of the industrial park could begin in either July or August this year.

'€œSome of the smelters may even kick off construction next year,'€ he said, adding that the rest might commence operations in 2016.

Gowan did not provide production figures for ferronickel, but said each nickel pig iron smelter might generate 1.2 million tons per year.

The nickel pig iron would be exported as no stainless steel factories were available locally, he added.