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ArcelorMittal to make auto steel in India in 3 years as car output booms: official

Reuters  |  NEW DELHI 

By Krishna N. Das

(Reuters) - India's state steel company will start producing automotive steel in a $1 billion partnership with in three years, a top official said, helping cut of high-grade steel as the country revs up car manufacturing.

Steel Authority of Ltd has approved entering into a "non-binding" agreement of terms on the joint venture with the world's biggest maker of the alloy, the state steelmaker said in a statement on Wednesday, confirming a report from Dec. 7 on the impending approval. (http://bit.ly/2BqSrNB)

said a definitive agreement with would be "finalised in due course subject to financial viability", but Steel Secretary Aruna Sharma told on Friday the joint venture would start production in three years.

Sharma, the top civil servant in the steel ministry, which controls through the government's 75 percent stake in the steelmaker, did not elaborate on the time or other details.

spokesman M.

C. Agrawal said the company and have cleared the first stage in the process of signing a formal agreement on the automotive steel venture, but that it was too early to talk about any production deadline.

An spokeswoman did not immediately reply to a request for comment.

and signed a preliminary understanding in 2015 to jointly produce 1.2 million tonnes of automotive steel a year, but disagreements over commercial terms have delayed the venture that would give the Luxembourg-based company a foothold in the world's fastest growing steel market.

has also been looking for other way into the Indian steel market, planning to bid for debt-ridden firms such as Bhushan Steel, Essar Steel and Bhushan Power and Steel, reported in September.

is banking on the partnership with to cut of high-grade auto steel, which mostly comes from Japan and South Korea. is a major automobile producer and exporter, and the country is stepping up manufacturing under Prime Minister Narendra Modi's "Make in India" campaign.

Maruti Suzuki, Hyundai Motor and Tata Motors are among the top-selling carmakers in the country. is forecast to be the world's third-largest car market by 2020, up from fifth-largest now.

For money-losing SAIL, the deal would help it rise up the value chain and compete more effectively with private rivals such as and Tata Steel, both of which already make auto-grade steel.

Billionaire Sajjan Jindal's steel-to-power JSW Group has built enough capacity to make 2.3 million tonnes a year of auto-grade steel with technology from Japan's JFE Holdings, and plans to diversify into electric car manufacturing using its own steel.

(Reporting by Krishna N. Das; Editing by Tom Hogue)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 15 2017. 14:57 IST
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