Iron and Steel

Road Ban Delays Delta Prima’s Plan to Restart Sponge Iron Plant

Road Ban Delays Delta Prima’s Plan to Restart Sponge Iron Plant
Mining News Pro - PT Delta Prima Steel, an Indonesian sponge iron producer, has delayed restart of its plant to September, from an initial plan to resume production in June, after villagers banned the road from an iron ore mine to the company’s plant, Haykel Hubeis, the company’s director said in an interview early this week.
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According to Mining News Pro - PT Delta Prima Steel, an Indonesian sponge iron producer, has delayed restart of its plant to September, from an initial plan to resume production in June, after villagers banned the road from an iron ore mine to the company’s plant, Haykel Hubeis, the company’s director said in an interview early this week.

In the past two months, some villagers have prohibited the company’s trucks which carry high-quality iron ore for the plant, from passing the so-called ‘regency’s road due to concern the traffic may damage the road, Hubeis said.

“We’re confused because the villagers allow trucks carrying river rocks, which are heavier compare to our trucks to pass the road,” Hubeis said. “As a company, we’re willing to give compensation for maintaining the road so that it can be passable by everybody,” he said.

PT Delta Prima is one of very few companies producing sponge iron by processing iron ore. The country’s scattered iron ore deposit is one of the problem hindering development of sponge iron plants. Most Indonesian steel producers use domestic or imported scrap as raw material as there are barely sponge iron producers, if not non-existent, in the country. Indonesia produced around 8 MnT of crude steel in CY’17.

The company sources iron ore from a mine operated by regional-owned mining company. But the deposits are scattered with the nearest located about 40 kilometer and the farthest is 80 kilometer from the plant.

To overcome the road block, PT Delta Prima takes different routes to transport the iron ore, which “as consequence, postpone resumption of production and inflate transportation costs because the longer distance,” said Hubeis. The company now is waiting for the regional government to help the company to talk with the villagers.

According to Hubeis, because of the road issue, PT Delta Prima may able to restart production as earliest as September.

PT Delta Prima said previously it planned to produce around 25,000 tons of sponge iron this year and will ramp up by 5.000 ton in every four months.

If the planned restart materialise in September, PT Delta Prima plans to produce 50,000 tons of sponge iron, Hubeis said. The company plans to export all its products to Bangladesh and Sri Lanka as Indonesia’s domestic demand remains limited.


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