The Korean export credit agency (ECA) has led the lenders on a US$220mn package for a steel mill project in Indonesia.

Kexim was joined by ANZ, BTMU, Credit Suisse and HSBC on the loan, which has been issued to Krakatau Posco, a joint venture between Indonesia’s state-controlled Krakatau Steel and Posco, the Korean steel giant.

It’s another raft of finance to go towards the huge integrated steel mill in Cliegon, in Indonesia’s Banten province. The joint venture borrowed US$1.73bn in December 2011 to get the project off the ground. The 14-year finance came from the same banks present on the latest tranche, with SMBC also joining.

The project consists of six separate plant units: a sinter plant, a coke plant, a blast furnace, a steel-making plant, a continuous casting plant and a plate mill. It will employ 63,000 workers and produce 3 million tonnes of steel a year, doubling to 6 million tonnes after final development.

The steel produced will come in the form of slabs and plates for heavy industries, such as shipbuilding and marine construction.

In total, there will be US$6bn invested in the project, both debt and equity, making it the biggest investment project in Indonesia’s history.

It is the Indonesian government’s flagship project in its long-term goal of upgrading to a value-add economy. The export of unprocessed raw minerals has in some instances (bauxite and nickel) been banned outright. Foreign companies looking to export the minerals have been forced to invest in smelters and refineries – or at least to pledge to build them by 2017.

It rounds up a busy period in the markets for Posco, which is one of the main equity investors in the Roy Hill iron ore mine, Australia. Earlier this week (beginning March 24), the Pilbara facility attracted US$7.2bn in debt from 19 commercial banks and a host of ECAs.