AGREEMENT has been reached for an Indonesian steel firm to buy the

defunct Ravenscraig plant which will be dismantled and shipped to the

Far East

at a total cost of around

#525m.

Directors of the privately-run PT Gunawan Dianjaya company said it

would buy the 2,200,000-tonne capacity plant, closed by British Steel

last year, and reassemble it in North-east Malaysia.

A formal announcement was expected in the near future though a British

Steel spokesman in London yesterday denied that any deal had yet been

agreed. ''There is no other party involved in the talks but there are

still some points to be sorted out,'' he said.

BS also said the value of the transaction released by the Indonesians

included the considerable shipping and integration expenses, with the

actual price paid for the Ravenscraig plant a fraction of the total.

H. Rimbo, a Gunawan director said from the company's headquarters in

the eastern city of Surabaya: ''Given its capacity, it will be the

largest steel mill in South-east Asia.''

The plant, to be sited in the energy-rich state of Terengganu, will

also be South-east Asia's first blast-furnace steel mill and Malaysia's

first steel slab plant.

Rimbo said Gunawan, which has had experience in similar reassembly

operations, had been scouting for a disused steelworks for some time.

''It would be much more expensive to start a brand-new plant.''

Almost all the equipment and plant at Ravenscraig, weighing millions

of tonnes, will be shipped to Kemaman, the region's main deep-water port

with plentiful gas and water supplies.

Gunawan has appointed British Steel as consultant for the relocation

and work on the plant will start in Septem-

ber.

The resited mill is due to come onstream by mid-1995.

The Malaysian plant will use the blast furnace/basic oxygen method to

make steel slabs which will be processed further into steel plates and

hot-rolled coils. It will import six million tonnes of iron ore and coal

a year, mainly from Austra-

lia.

Gunawan will also build a hot strip mill, with a capacity of 1,200,000

tonnes a year, at the plant to make hot-rolled coils, mainly for

domestic consumption.

The remaining one million tonnes of its annual slab output will be

exported to industries in the Far East.

Some of the steel, which can be produced cheaply using local labour,

could eventually make its way back to Britain, though industry

specialists said high transport costs generally deter such bulk trade.