JAKARTA, INDONESIA - AUSTRALIAN firm BlueScope Steel Ltd. said on Friday it had expressed an interest in participating in the privatisation of Indonesia's largest steel maker, PT Krakatau Steel.

A spokeswoman for BlueScope in Australia said discussions were at a very early stage and it was too early to provide any details.

'PT Krakatau Steel is a valued supplier of feedstock for BlueScope Steel's metallic coating and painting facility at Cilegon (western Java) and we have an excellent relationship with this organisation,' she said.

'We are obviously interested in, and await the outcome of, the government's deliberations' on the possible privatisation of PT Krakatau.

Indonesian Investment Coordinating Board chairman Muhammad Lutfi told reporters that BlueScope, one of the largest Australian investors in Indonesia, had requested a meeting with his office but he could not comment further.

'The process is still a long one,' he said.

The office of industry ministry director general for metal Ansari Bukhari also confirmed that BlueScope chief financial officer Charlie Elias would visit Indonesia next week to discuss the government's plans for Krakatau.

Bukhari, who was not immediately available for comment, told the Jakarta Post that BlueScope had expertise in producing automotive steel which Indonesia currently imported.

ArcelorMittall, the world's largest steel maker, has also reportedly expressed an interest in Krakatau's privatisation.

The Financial Times reported last month that ArcelorMittall had earmarked 10 billion dollars (S$13.6 billion) for the expansion of its interests in Indonesia.

Indonesia is Southeast Asia's largest economy and has budgeted for a massive rise in public spending this year to repair crumbling strategic infrastructure, which is seen as an obstacle to attracting much-needed foreign investment. -- AFP