JAKARTA
(Reuters) - Indonesia's Krakatau Steel and South Korea's POSCO (NYSE:PKX) Holdings have signed an agreement to
invest $3.5 billion starting next year to expand their production capacity in
the Southeast Asian country, Indonesia's investment ministry and POSCO said on
Thursday.
The
expansion will also include the production of automotive steel for electric
vehicles (EVs), the Indonesian ministry said in a statement.
The
signing took place in Seoul, during the last leg of a trip by Indonesian
President Joko Widodo to North Asia.
The president had gone to China and Japan earlier in the week,
during which his ministries announced investment pledges by companies like
Japan's Toyota Motor (NYSE:TM) Corp and Sojitz Corp.
KRAKATAU
POSCO, a joint venture between the companies, has invested $3.7 billion in
steel production in Indonesia since 2010, Indonesia said.
POSCO is
also involved in a $9.8 billion project to create an EV supply chain in
Indonesia, to make use of the country's rich nickel reserves, led by another
South Korean company, LG Energy Solution (LGES).
The
ministry said the latest agreement will also help facilitate Indonesia's $32
billion project to relocate its capital from Jakarta to a new city called
Nusantara on Borneo island.
Krakatau
Steel did not immediately respond to a request for comment.