Shareholding continues to halt steel JVS

Differences on shareholding issue continue to come in the way of formation of two steel-making joint ventures — SAIL-Posco and NMDC-Severstal — involving over Rs 35,000 crore investment, as both the foreign companies are insisting on owning majority stakes in them.

Though differences between the two domestic firms and the foreign entities over the issue has been on for quite some time now without signs of an early settlement, C S Verma, chairman of both SAIL and NMDC, sees light at the end of the tunnel.

"I won't say stalemate. The very fact that the dialogue is continuing and has not broken off is a sign that we are going in the positive directions," Verma said when asked to comment on the two MoUs, signed over a year ago.

SAIL had signed a memorandum of understanding (MoU) with South Korea's Posco to form a joint venture company at Bokaro in Jharkhand for setting up a three-million tonne per annum steel-making unit last year with a Rs 16,000 crore investment.

NMDC had inked a MoU with Russia's second largest steel maker Severstal in late 2010 for a two mtpa plant initially in Karnataka with around Rs 20,000 crore investment.

While in the case of SAIL-Posco venture, the South Korean major would bring an iron-making technology that is not available anywhere other than in its own domestic plant, severstal would only bring coal, a raw material for steel-making, if the deal with NMDC comes through.