China's Nanjing Iron & Steel Co., Ltd. (Nanjing Steel) plans to invest in a coking plant in Indonesia, the company said in an announcement late November 18, as a way to shun increasingly stringent environmental rules in China.
Designed with the production capacity of 2.6 million tonnes per annum, the project would be launched in Morowali Industrial Park, Central Sulawesi province of Indonesia, by a joint venture created by Nanjing Steel, Tsingshan Holding Group, Shanghai Decent Investment Group and others. Nanjing Steel will hold 78% in the venture.
China has been on a drive to curb excess and outdated coke capacity to reduce pollution. With tougher environmental rules, building a coking plant in China is less cost-effective.
Another intention is to more easily access the raw material coking coal from Australia, which is shorter in transport distance to Indonesian than to China.
China has since October stopped importing coking coal from Australia owing to the escalated diplomatic tension. From the long run, investing a plant in Indonesia will help the steelmaker to keep steady material supply.
As China and Indonesian have both entered the RCEP agreement, it seems to be the ongoing trend that more and more Chinese enterprises will chose to investment in Indonesia and other South Asian countries.
(Writing by Alex Guo Editing by Tammy Yang)
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