JAKARTA, Jul 14 -- Nickel and gold producer PT Aneka Tambang (ANTM.JK) and Shanghai Baosteel Group Corp. will soon sign a $1.2 billion agreement to develop a ferronickel plant in Kalimantan, an official with Indonesia's state agency for investment told reporters Wednesday.

"The two companies are expected to sign the agreement soon or later this month," said Gita Wiryawan, head of Indonesia's Coordinating Board for Investment.

He said the plant, construction of which will start later this year, will have a capacity of 500,000 metric tons of ferronickel a year.