New Delhi: South Korea’s Posco expects to have a new steel plant in India to be set up with the state-run Steel Authority of India (Sail) to be in production by 2013, a top executive said, making it likely to be the first of three plants which Posco hopes to have in India.
“In three years we should hopefully see production happening from Bokaro,” Vikash Sharan, vice president of Posco India, said in emailed replies to questions.
“We are positively optimistic about other projects also,” he added.
Posco, the world’s third-largest steel maker, wants to grab a foothold in India where demand for steel is rising by 10% a year with output unable to keep pace and imports trickling in.
Its other projects in the country are for a plant in Orissa, currently waiting for environment ministry approval, and another in Karnataka, where it is waiting for the government to acquire land for construction work.
The project with Sail, India’s largest domestic steel maker, is likely to comprise two units of 1.5 million tonnes capacity each inside Sail’s existing Bokaro Steel Plant complex in the northern state of Jharkhand, with Posco holding a majority stake, Sharan said.
As a result, there will be no need to acquire land, which is the main stumbling block to its other ventures, so construction could get underway faster.
“Some issues are being worked out. We expect that sometime in December an MoU (memorandum of understanding) could be signed with Sail,” he said.
Sail’s chairman C.S. Verma said last week he expected to finalise the venture by mid-December.
Sharan said the company’s investment in Bokaro is estimated at Rs150 billion ($3.38 billion).
India produced about 60 million tonnes of steel in the year ended March 2010, government data shows, with 124 million tonnes of the alloy needed by 2012 to feed its infrastructure expansion and other needs.
DELAY IN LARGEST PLANT PLAN
In Orissa, Posco’s plans for a 12 million tonne steel plant - India’s largest foreign direct investment at $12 billion - is awaiting approval from the environment ministry.
A final decision rests with environment minister Jairam Ramesh, after evaluation by an expert committee on 9-10 November of reports on the project.
Last month the majority of a review panel said existing green clearances should be scrapped as the plant could violate forest laws in the partly forested area close to the sea.
Sharan said he hoped the project would get the go-ahead.
“We are fully committed to the Orissa project. With the kind of support that we have received from central and state governments we are quite hopeful of realising the project,” he said.
“We know that we have done everything as per the law of the country,” he said.
Orissa’s chief minister Naveen Patnaik has spoken in favour of having the plant due to the jobs it would create.
At Posco’s third project, for a 6-million-tonne steel plant in Karnataka state in south India, the company is waiting for land for which it has already paid a partial sum to the state government, Sharan said.
“We have been assured land,” he said.