The three million tonne per annum steel plant proposed to be set up jointly by public sector Steel Authority of India Limited (SAIL) and South Korean steel major Posco is likely to be operational in around three years.
The joint venture agreement between SAIL and Posco for the project, which would come up at Bokaro (Jharkhand), will be finalized within a couple of months.
The detailed project (DPR) for the integrated steel plant involving a cost of Rs 12,000-15000 crore, is being processed and would be readied within two months, SAIL chairman Chandra Shekhar Verma told reporters on the sidelines of a National HR Conclave organized by the city-based KIIT School of Management.
The steel plant will commence operations is three years from the finalization of the joint venture agreement, he added.
SAIL and Posco had entered into a Memorandum of Understanding (MoU) for setting up the steel plant in May this year.
Asked if SAIL would have the majority stake in the joint venture, Verma said, “While SAIL would like to have the majority stake, we are also open to Posco having the controlling stake in the JV. Nothing has been decided as of now.”
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In parallel, SAIL also hopes to stitch a joint venture pact with the Japan-based Kobe Steel within two months for setting up a speciality steel plant at Durgapur on around 100 acres of land.
The joint venture agreement with Kobe Steel would be finalized in two months, said Verma.The speciality steel plant which would produce 0.5 million tonnes of iron ore nuggets per annum with an iron content of 95 per cent, would entail an investment of Rs 5000 crore. These nuggets can be manufactured without using coking coal, one of the vital inputs of steel making in the country.
Meanwhile, SAIL's Rs 80,000-crore massive capacity expansion plan which would see the PSU's steel output go up from the existing 14 million tonne per annum (mtpa) to 24 mtpa by the end of 2013-14 is on the fast track.
Orders worth Rs 50,000 crore have already been placed for the capacity expansion plan which would be met by and large through the company's internal resources, the SAIL chairman stated.
Asked on SAIL's forthcoming Follow on Public Offer (FPO), he said, “The merchant bankers for the FPO have been finalized. The timing of the FPO would depend on market conditions.”
Expressing optimism over the country meeting its steel output target 0f 124 million tonnes by the end of 2012, Verma said, the country is going to witness a quantum jump in steel production in the next 7-8 years.SAIL, the country's largest steel maker has an annual turnover of $10 billion (around Rs 47,000 crore) and a market cap of $20 billion (around Rs 940,000 crore). The steel PSU has over four lakh shareholders and employs about 125,000 employees.