Posted on 21 Apr 2015
Talks are on between South Korean
steel major Posco and state-run domestic giant SAIL to set up an integrated
steel plant, the government today said.
"SAIL and Posco recently discussed possible collaboration opportunities
including setting up of an integrated steel plant," Minister of Steel and
Mines Narendra Singh Tomar told Lok Sabha in a written reply.
"The discussions are at a very
preliminary stage," he added.
On Posco's USD 12 billion Odisha project, considered the largest FDI in India,
Tomar in his reply said, "The Memorandum of Understanding (MoU) of Posco,
for setting up of a mega steel plant at Jagatsinghpur in Odisha has not yet
been renewed by the State Government."
The steel maker's proposed project
in Odisha has been stalled for about a decade on account of regulatory hurdles,
including delays in land acquisition.
With this project for producing 12 million tonne per annum (MTPA) steel stalled
for long, Posco has been exploring other investment opportunities in India.
Sources said that Posco and SAIL are
in talks to jointly set up a 3 million tonnes integrated plant in Jharkhand,
after their initial talks could not materialise.
The world's fourth largest steel firm's CEO Kwon Oh-Joon, India CMD Gee Woong
Sung and Korean Ambassador Joon-Gyu Lee had met Prime Minister Narendra Modi in
January and are believed to have discussed new investment plans.
Earlier, negotiations between SAIL
and Posco for steel plant at Bokaro had failed on the ownership issue. Posco
was demanding a majority stake which SAIL had refused. As a result a pact
between them for the project did not materialise.
Posco had entered into a pact with Odisha government on June 22, 2005 for
setting up the plant.
Besides these delays, in a blow to
the company, earlier this year the Centre said Posco would be have to
participate in auction to procure iron ore mines to feed its facility instead
of direct allotment assured earlier.
Earlier, Tomar had said the firm, which was assured Khandadhar iron-ore mine
via dispensation route, will have to participate in the auction process to get
a mining lease.
Posco was previously promised the
Khandadhar iron ore mine by the state government for its mega steel plant, but
the actual allocation never happened due to delays in regulatory approvals.
Although the company has an MoU with the Odisha government for assured
allocation of mining leases, the passage of the Mines Bill has mandated the
allocation of all mines through auction route only and the agreement with the government
is not binding.
