SAIL in talks with Japan's Kobe, Nippon for JVs

After South Korea's Posco, the state-owned Steel Authority of India (SAIL), is talking to Japanese steel makers Nippon Steel and Kobe for a possible joint venture in the country.

"We are discussing with Kobe Steel to set up a joint venture plant with a capacity of 0.5 million tonne per annum (MTPA). Feasibility report on it is expected by September. Kobe can provide us with its ITMK3 under the arrangement.

"With Nippon Steel discussions are at very initial stage," SAIL Chairman C S Verma told PTI.

The investments in the proposed ventures could not be immediately ascertained. Industry observers said the proposed projects could see a total investment of Rs 1,000 crore.

Kobe, operating worldwide under the brand Kobelco, would provide its latest technology -- ITMK3 to SAIL, under the proposed JV. The ITMK3 technology uses fines and thermal coal to produce steel.

SAIL is already in talks with Posco for a 1.5 MT plant at Bokaro at a cost of Rs 11,000 crore for which an agreement is likely to be signed within three months.

"We are expecting SAIL-Posco's deal to be finalised in October. There is a joint team working on the draft feasibility report, which is expected to be prepared in next two months. The JV with Posco at present, will be for setting up 1.5 million tonne plan based on finex technology in Bokaro," Verma said.

On equity stake in the JV with Posco, Verma said it is still to be decided as negotiations are on for various models.

"Negotiations are underway. There are various models we are looking at. Once we discuss all the issues then only we will be able to speak about it. 50:50 JV is also one of the models," he said.

"We want to import such superior technology for producing steel or else look to bring the technology in India by forming joint venture with them. We want to upgrade all our units and compete with the best in the world," he added.

On two downstream mills there, he said these were under discussion. A Cold Rolled Grain-Oriented (CRGO) and Cold Rolled Non Oriented -- to cater electricity sector is proposed, one in Maharashtra and the other in Jharkhand.

Besides, Verma said SAIL is also in talks with ArcelorMittal for a joint venture.

SAIL is working to enhance its annual steel production capacity to about 23 million tonnes (MT) by 2012, from the present 14 million tonnes (MT) and has also chalked out a plan to increase the capacity to 60 MT by 2020.

At present, India has an annual production capacity of 72 MT, which is proposed to be raised up to 120 MT by 2012.