South Korean steel major Posco
, whose integrated project in Odisha has been stuck for years, will join hands with Uttam Galva
Steel Ltd (UGSL) to set up a three-million-tonne-an-annum (tpa) integrated steel plant
at Satarda in Maharashtra, sources said.
This move will also see two global steel makers, Posco and ArcelorMittal, which holds 33.80 per cent stake in Uttam Galva, coming together in a steel project in India.
For the project, Uttam Galva, a leading cold-rolled and galvanised steel maker in eastern India, has earmarked about 1,700 acres of land it owns at Satarda. A preliminary discussion on the venture was held in Mumbai last Friday between the Posco India CMD Y W Yoon and Uttam Galva CMD Rajinder Miglani, in the presence of top officials of ArcelorMittal.
Confirming the meeting, Yoon said, “Uttam Galva is keen to set up a steel project with us in the Konkan region. They have clear possession of the land and the site is close to port facilities and iron ore mines in Goa. They have offered us about 1,700 acres, which can accommodate steel plant of three-million tonne capacity.” An Uttam Galva spokesperson declined to comment on the proposed joint venture.
According to informed sources, Miglani has told Posco officials that because they are facing land acquisition problems for their integrated steel project in Odisha, they should consider Satarda, where Uttam Galva already owns land. Apart from the port and iron ore mines in close proximity of the proposed site, Posco has two downstream units in Maharashtra - one processing plant near Pune and a galvanisation unit at Mangaon in Raigad district, which is being upgraded with addition of a cold-rolling mill.
“We are considering the proposal. But our priority is the Odisha project. If it does not happen, we will take a call on it,” said Yoon. Although the structure of the proposed joint venture has not been worked out, sources said the cost of the land and its development would be considered as Uttam Galva’s investment in the project.
On its own, Posco India proposed to set up 12-tpa integrated steel plant near Paradip in Odisha.
However, the project is in limbo due to problems in land acquisition following local protests.
The company initially needed 4,004 acres, but later scaled down its immediate requirement to 2,700 acres to start the first phase, comprising two modules of 4 million tonnes each.
Over the past eight years since the signing of the Memorandum of Understanding, the Odisha government has acquired 1,700 acres for the project and out of this, handed over only 540 acres on paper to the company. The company does not have physical possession of any land.