Earthstone to build steel plants in Indonesia, Morocco
Iron ore producer Earthstone Group is looking to build steel plants in Indonesia and Morocco, assistant vice president Joshina Kapoor has said.
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The steel plant in Indonesia will be commissioned around the third quarter of 2014 with a 240,000 tpy capacity for rebar and billet, Kapoor told Steel First on the sidelines of the Asian Mining Indaba in Singapore on Wednesday October 31.
The plant in Morocco will be commissioned in the first quarter of 2014 with a capacity of 150,000 tpy.
“The steel plants will use scrap as raw material to begin with, but eventually we have plans to integrate our iron ore operations and steel operations so they will be using our own iron ore to produce steel,” Kapoor said.
Earthstone currently has one producing iron ore mine in Sulawesi, Indonesia, with output of 1.5 million tpy.
Another iron ore mine in Indonesia, in Sumatra, will have a run rate of 1 million tpy and is expected to reach production in a year’s time.
An iron ore mine in Morocco is currently producing 2 million tpy.
Kapoor said the recent fall in iron ore prices has affected Earthstone as it has been shipping its ore to China, but the company is “good to go” from a long-term perspective as the ore will be used in its own steel plants.
“We see huge potential in Indonesia, not so much for iron ore but more for steel,” Kapoor said. “There’s a huge amount of urbanisation and industrialisation in the country. From that perspective, steel is really going to thrive.”
Indonesia still imports around 1.7 million tpy of steel although the country already has a few steel plants, she noted. Its steel consumption is projected to reach 70kg per capita by 2020 from the current 26kg.
“There’s really a demand-supply gap locally, so there’s huge potential in the market,” Kapoor said.