Australia's BHP denies reports of move to Indonesia

Australia's BHP denies reports of move to Indonesia

SYDNEY (AFP): The chief of Broken Hill Proprietary Co. Ltd.'s
steel division yesterday denied reports that the resource giant
was considering moving its Australian steel operations to
Indonesia.

"The most important point that I want to make is that in no
way are we looking at steel making anywhere overseas in lieu of
steel making in Australia," BHP Steel general manager Ron
MacNeilly said.

"It's just not on the agenda at all that any investments would
be at the jeopardy of Australian investments," he told national
radio.

McNeilly's comments came in response to Indonesian reports,
quoted in newspapers here, that BHP Steel was about to secure a
25 percent stake in PT Krakatau Steel, ahead of its US$650
million float.

"Australians face sack but BHP looks at making steel in
Indonesia," The Australian newspaper said, linking the deal with
BHP's unpopular decision to close down its historic Newcastle
steelworks.

BHP outraged unions two months ago when it announced it would
close Australia's oldest steelworks by the end of 1999 with the
loss of about 2,000 jobs.

The assistant secretary of the Australian Workers Union
Newcastle branch, Kevin Maher, said he was "wounded and disgusted
but not surprised" at BHP's reported interest in the Indonesian
investment.

"(BHP) are not interested in making steel in Australia because
it is too hard and it's clear that the future of steelmaking as
far as it is concerned is overseas, particularly in Asia," he
told the paper.

Prime Minister John Howard is to visit the depressed
industrial city Wednesday for the first time since BHP announced
the bad news.

BHP has denied it agreed to buy a stake in the government-
owned Krakatau but admitted it had been involved in discussions
with the group about its planned part-privatization.

"There is certainly no agreement between BHP and Krakatau to
take up any position in their proposed float," BHP Steel division
spokesman John Devers said.

But he added that BHP was aware of the Indonesian government's
decision to float a portion of Krakatau and that it did have
discussions with Krakatau from time to time.

BHP has a long history with Krakatau through their
shareholdings in a Cilegon metalic coating and painting plant.