South Korea's largest steelmaker POSCO and Indonesia's Krakatau Steel held a groundbreaking ceremony Thursday for Southeast Asia's first integrated steel mill. The ceremony took place at a 400 hectare (990 acre) site next to Krakatau Steel in Cilegon City in West Java, POSCO said in a statement. When the first phase is completed by 2013, it will have an annual capacity of three million tonnes. Completion of the second phase will double capacity but no timeframe for that has been set so far. 'This groundbreaking ceremony marks the first step toward the first integrated steel mill in Southeast Asia,' POSCO chairman Chung Joon-Yang was quoted as saying at the ceremony in Jakarta. An integrated steel mill is capable of producing a full range of finished products from raw materials including iron ore. POSCO and Krakatau set up a joint venture in September, with the South Korean form owning 70 percent. Krakatau will hold the remaining 30 percent but may increase its share to 45 percent later, POSCO said. 