Wuhan Iron and Steel Group (Wugang) has completed a preliminary feasibility study for a proposed $5 billion investment in an integrated steelworks in Indonesia, the ASEAN country’s industry minister, MS Hidayat says. However, the project has made slow progress since the idea was first suggested in 2010, Kallanish notes.

The proposed 5 million tons/year plant would likely target Indonesia’s rapidly expanding automotive sector. Wugang is a major autosheet supplier to China’s domestic automotive industry and Indonesia’s automotive output has been growing at 6-7% per year in recent years, hitting 1.2 million units in 2013.

Japan’s Nippon Steel and Sumitomo Metal Corp recently finalised a joint venture in Indonesia with local producer PT Krakatau for a 480,000 t/y autosheet works.

However, a site for the mill has not yet been chosen and a previous plan for Wugang to invest in two 1m t/y steel mills in North Sumatra and Kalimantan in 2011 was cancelled with no reason given. Neither Wugang nor the Indonesian government have yet made any mention of how the project could be financed in the current investment climate.