Indonesia’s state asset fund, Danantara, will become the primary investor for PT Krakatau Steel’s new production facility, replacing previous plans for a majority partnership with China’s Delong Steel Group. Groundbreaking is scheduled for March.

Commercial, Business Development and Portfolio Director Hernowo explained that while the company initially sought Chinese capital to address financial constraints, Danantara’s involvement ensures local control. Although foreign entities from China or South Korea may still provide technology for the project, they will not hold majority stakes.

Located in Cilegon, the plant aims for an annual capacity of 3 million tons. This project supports national mining agendas by processing iron ore into higher-value products such as carbon steel to reduce reliance on imports.