Govt for SAIL-Posco deal by May-end | business | Hindustan Times
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Govt for SAIL-Posco deal by May-end

business Updated: Apr 11, 2010 12:35 IST

SAIL and South Korea's Posco may seal a deal by the end of next month to set up an estimated Rs 15,000 crore steel plant in Jharkhand with the government offering all support to expedite the project.

"This is my desire that a deal between SAIL and Posco is finalised before SAIL Chairman S K Roongta retires on May 31," Steel Secretary Atul Chaturvedi said, adding "even we are ready to offer whatever support SAIL seeks for the purpose."

Chaturvedi was scheduled to lead a delegation to South Korea last week, but the trip was later cancelled.

"If it does not happen during the tenure of the present Chairman, there is a likelihood that it could get delayed as a new person would take charge of SAIL," he added.

Steel Authority of India and Posco are in talks for setting up a steel unit likely in Bokaro, Jharkhand, where the PSU operates a 4.5-million tonnes per annum (MTPA) plant and is expanding its capacity to 7.5 MTPA, part of the domestic firm's Rs 70,000 crore programme.

"Both the firms are keen on the venture. ...Bokaro can be an ideal location for the plant which is likely to be built using Posco's FINEX technology," he said.

The FINEX technology uses iron ore fines and low quality coal to produce high-grade steel, which could be further processed by SAIL to make specialised steel. Steel Ministry sources said the JV could set up a capacity to produce 1.5 MTPA of steel, entailing an investment of Rs 15,000 crore.

The Steel Secretary further said the deal may also see Posco providing other technology to SAIL for making high- grade steel, which could be used in making turbine. Currently such products are imported in India.

Posco and SAIL are already in pact for supply of technology and technical know-how.

Last month, a Posco team, led by its CEO Chung Jun-Yang, met top the brass of SAIL and the steel ministry and had gone for a recce in Bokaro.

Posco's proposed Rs 54,000-crore plant in Orissa has failed to take off for the past over four years mainly due to problems in acquiring land.

Faced with the inordinate delays, it had started looking for opportunities in states like Jharkhand, Karnataka and Maharashtra and is also actively pursuing a proposed JV plant with SAIL.