PT Krakatau Steel delays payment for Aussie project

PT Krakatau Steel delays payment for Aussie project

SYDNEY (Reuters): Meekatharra Minerals Ltd said yesterday the joint venturers in their South Australian-based pig iron export project would look for funding elsewhere because of a delay in payments from their Indonesian partner.

The Indonesia government-owned PT Krakatau Steel had said the situation in Indonesia may delay its planed payments of US$5 million into the joint venture, Meekatharra said.

"The joint venturers, including the South Australian Government, are, as a contingency, in the process of sourcing additional funding to prevent delay and facilitate the early commencement of the final feasibility study," Meekatharra said.

Ausmelt Ltd, which is one of the joint venturers, told Reuters in March the $500 million project had been delayed because of the Indonesian partner's problems.

"PT Krakatau Steel has indicated a continuing strong commitment to the project, but circumstances in Indonesia may cause some unplanned delay in the payment," Meekatharra said.

"The immediate target is to secure funding commitments and commence construction of the Demonstration Plant at the earliest opportunity," it said.

Ausmelt has a 34 percent stake in the project, Meekatharra has 34 percent, Krakatau has 15 percent and the South Australian government has 17 percent.

The 2.5 million tons a year project would produce export revenue of about A$530 million a year and was expected to start up in 1998 or 1999.

The funding was needed to build and operate a A$15 million demonstration plant.