Chinese firm to set up steel mill in Malaysia

Chinese firm to set up steel mill in Malaysia

KUALA LUMPUR (AFP): A major company in China wants to set up a 15 billion ringgit (US$6 billion) steel mill in Sarawak state that could emerge as Malaysia's biggest steel operation, officials said yesterday.

"We are in the final stage of negotiations with the Chinese firm which we cannot identify until the deal is clinched," Su'ud Suhaili, a senior government official, told AFP by telephone from Sarawak's capital Kuching.

Suhaili said that based on negotiated plans so far, the plant could produce about five million tons of steel a year and be sited in the industrial town of Bintulu, close to offshore gas fields.

The largest steel mill in Malaysia is operated by state-owned Perwaja Steel, with a capacity of about one million tons, industry officials said.

Sarawak Industrial Development Minister Abang Johari Openg was quoted by Bernama news agency as saying late Monday talks with the Chinese company were held recently during the visit of a trade delegation to China and Hong Kong.

Last month, Malaysia's southern Johor state government announced another Chinese steel company, Show Gang, had expressed interest in setting up a mammoth steel mill in the state on a joint venture basis with parties in Singapore and Hong Kong.

Suhaili said the proposed mill in Sarawak could be gas-driven initially before tapping power from a 15 billion ringgit hydro- electric dam to be built nearby in 10 years' time.