KS to set up new subsidiary to enter mining industry

State owned steel company PT Krakatau Steel Tbk plans to expand into hard coking coal and iron ore mining activities to support the company?s growing steel production.

The company?s president director Fazwar Bujang said in Jakarta on Monday that the company would establish a new subsidiary which will operate under the name of PT Krakatau Natural Resources (KNR) and take charge of the new business.

?We hope the new subsidiary could be formally established at the end of this year,? he said on Monday. He said that the new subdiary would, in the first stage of its operation, acquire stakes in existing iron ore and coal mining companies.

Fazwar also said that KS planned also to build a new subsidiary with South Korean steel producer Pohang Iron and Steel Company (Posco) to process steel waste produced by their join steel venture KS-Posco. Total investment will reach $450 million, he added.

KS-Posco operates a steel plant near KS?s industrial complex in Cilegon, Banten. Posco and KS own 70 percent and 30 percent stakes, respectively, in the joint venture. The steel plant is now under construction. (*)