Posco to have management control in SAIL JV: Verma

Korean steel maker Posco will have management control in planned Rs 16,000-crore joint venture with SAIL, state-owned company's Chairman CS Verma said today.

"Management (of the joint venture) will be with Posco," Verma said at press conference here.

Hours after Verma made the comments, SAIL issued a formal press statement, stating: "the issue relating to shareholding pattern of the proposed joint venture has been under discussion between the companies and is on a very, very positive path."

SAIL and Posco have been in discussion to set up a 3 million tonne a year steel plant at Bokaro in Jharkhand for more than a year.

But the company statement did not explicitly state that Posco would have management control. It merely stated that the Korean firm would have "full operational control".

"As Finex technology is operational only in the Pohang plant of Posco, it would be having full operational control of the proposed joint venture," the statement quoted Verma as saying.

SAIL said discussions with Posco were positive but the vexed shareholding issue was yet to be resolved.

"The issue relating to shareholding pattern of proposed JV has been under discussion between both the companies and is on a very, very positive path," it said.

The proposed plant, which would use Posco's patented Finex technology, plans to invest Rs 16,000 crore to produce very specialised steels, mainly for the automobile sector.

"Various commercial terms and conditions for the proposed joint venture have been discussed and certainty has been reached in many of these areas," the statement added.

Being a leader in technology and operating practices, Posco would be able to guide the operations as per the global benchmarks in efficiency and quality parameters, he added.

The shareholding issue has been haunting the two firms for quite some time now. Earlier in the month, steel minister Beni Prasad Verma had to cancel his tour to Korea for the agreement signing ceremony between the two parties as no amicable solution was reached on shareholding.

Finex is an environment-friendly iron-making process where iron ore fines are directly used.