Senior executives from Korean steelmakers Posco and Hyundai visited the Vizag unit of the state-run Rashtriya Ispat Nigam (RINL) on October 22 to explore the proposal to set up a 5-million-tonne-per-annum (mtpa) steel plant along with the PSU.
Senior executives from Korean steelmakers Posco and Hyundai visited the Vizag unit of the state-run Rashtriya Ispat Nigam (RINL) on October 22 to explore the proposal to set up a 5-million-tonne-per-annum (mtpa) steel plant along with the PSU. A month ago, the steel ministry held initial talks with these firms.
The purpose of the visit, sources said, was to get a first-hand experience of the existing facility, where RINL operates a 6.3-mtpa unit now and explore the means and ways to execute the proposed steel unit, which could entail a minimum of Rs 30,000 crore investment.
Sources said the team was led by the South Korean ambassador to India. Joining them were the representatives of Union steel ministry and senior officials of the state-owned firm. RINL has available land to create an additional 15 mtpa capacity within the existing plant premises.
Prodded by the Prime Minister’s Office (PMO), the steel ministry recently initiated talks with the Japanese and Korean steel mills for setting up a 5-mtpa steel plant through the joint venture, which is proposed to produce high-end steel meant for automotive and other sectors, aimed at imports substitution.
In the preliminary discussion, the ministry ensured the delegation uninterrupted supply of iron ore, a key raw material in steel-making and the required land for the proposed unit, being envisaged in line with the PM’s ‘Make in India’ programme.
The PMO had instructed the steel ministry to “hold discussions with the concerned ministries/parties to facilitate domestic manufacturing of high-grade steel with the help of Japanese and Korean companies.”
Apart from their rich experience in the manufacturing of value-added steel, the particular reference to the Japanese and Korean firms in the PMO directive might have stemmed from the fact that India is a regular exporter of iron ore to the Japanese steel mills (since 1963) and Posco, South Korea (since 1973).
As a part of India’s bi-lateral relations, India exports iron ore to Japanese steel mills and Posco. However, the quantity of exports is small. At the same time, India imports value-added steel from these countries. The steel ministry thinks that the plant will be a win-win for both the parties.
The proposed venture will add muscle to India’s capacity augmentation effort, under which the government has targeted to jack up the domestic installed steel-making capacity to 300 mtpa by 2030-31 from around 134 mtpa now. However, there is no foreign steel firm doing the manufacturing here, though many tried their luck in vain in the past.
South Korean major Posco, whose representatives were present in the recent meeting, has been trying hard to enter into Indian steel-making space since long. In 2007, it had signed an initial pact with state-run Steel Authority of India to form a joint venture in India but could not taste success.
Russian firm Severstal’s plan for a joint venture with another state-run firm, NMDC, also failed to bear fruit. In both these cases, the overseas partners wanted to retain the majority stake in the venture, which SAIL and NMDC opposed.