SAIL to set up two plants with Posco: Roongta

The state-owned steel giant Steel Authority of India (SAIL) today said it will set up two plants in joint venture with Posco and is "in serious stages of discussions" with the South Korean company for the same.

"We are in serious stages of discussion with Posco for setting up a steel-making facility in Jharkhand," SAIL Chairman S K Roongta told reporters in a conference in Kolkata, adding the state-run firm will also join hands with the Korean giant for a specialised steel mill in Maharashtra.

Roongta also said the country's largest steel maker is in talks with ArcelorMittal and Tata Steel for setting steel plants in the country, which may help it reach its of annual 60 million tonne per annum production capacity by 2020 from the current 14 million tonne.

Giving details about the proposed Jharkhand project, Roongta, who was part of steel secretary Atul Chaturvedi's recent delegation to South Korea, said the plant with an initial capacity of 2mtpa would use Posco's Finex technology, which uses iron ore fines and non-coking coal.

"More talks will be held regarding the joint venture," the SAIL chairman said, adding a detailed project report is being prepared. "The JV will benefit SAIL and will be a win-win for both," Roongta claimed.

SAIL would also tie up with Posco for building a cold rolled non-oriented plant in Maharashtra, the chairman said.

Though Roongta did not elaborate on the investments in these projects, industry observers say both these projects would see an investment of about Rs 15,000 crore.

Steel secretary Chaturvedi had discussions with Posco chief executive Chung Joon-yang on the proposed joint ventures with SAIL, Roongta said.

Asked about the timeframe for setting up the SAIL-Posco plants, he remarked, "there was definitely some progress in our discussion, but no timeframe has been fixed."

Besides these joint ventures, Roongta said SAIL is also keen on setting up a Rs 60,000-crore steel plant in the surplus land available at Sindri fertiliser plant in Jharkhand. The steel maker is learnt to have submitted a proposal in this regard to the chemicals and fertilisers ministry. "Due diligence of the project is yet to be done," Roongta, who demits office on May 31, added.

On SAIL's international efforts, he said after acquiring coking coal properties abroad through International Coal Ventures, 10 merchant bankers were appointed to conduct diligence on six properties abroad.