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Krakatau Steel scratches head over blast furnace
State-owned PT Krakatau Steel is devising a strategy for its stalled blast furnace project.
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Krakatau Steel employees watch the production of the first hot rolled coil (HRC) steel in the company's second hot steel mill in Banten on May 17, 2021. (Courtesy of Krakatau Steel)
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tate-owned PT Krakatau Steel, the top metalmaker in the country, is devising a strategy to restart operating a multimillion dollar blast furnace whose operations were stopped in 2019 because of poor economics.
Krakatau Steel president director Silmy Karim, speaking on Monday, said the company was seeking US$100 million in investments to restart the project, which is worth $594 million. The funds would be used to install a basic oxygen furnace (BOF) to optimize operations.
“There are several [investors] who have shown interest in Krakatau Steel’s iron steel-making,” Silmy told House of Representatives Commission VII overseeing energy and mining at a working meeting in Jakarta.
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The blast furnace complex, located in Cilegon, Banten, began commercial operations in July 2019 but stopped in December 2019. The facility has an annual production capacity of 1.2 million tons of hot metal, which will serve as an intermediary material to make a variety of finished steel products, including metal slabs.
But after starting up the furnace, the company discovered that the price of produced metal slabs was higher than market prices, posing a potential financial loss for the company if production continued, Silmy claimed.
Read also: Krakatau Steel sees 91% revenue rise in first half of 2021
