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.