SAIL's board may in its upcoming meet approve granting up to 74 per cent equity to South Korean steel giant Posco in the proposed Rs 11,000-crore plant that will be built jointly in Jharkhand.
A sub-committee of SAIL's board had last month cleared the JV proposal, for setting up the plant on a piece of land at Bokaro Steel Plant (BSP), and forwarded it for approval.
The board is expected to meet later this month
"The board sub-committee has recommended Posco's claim to 74 per cent equity in the private joint venture company. Posco claimed the stake on the basis of its patented FINEX technology and funding by South Korean government to develop the same," a person in the know of the development told PTI.
The FINEX technology uses iron ore fines and non-coking coal to produce high-grade steel, which could be further processed by SAIL to make specialised steel items. Currently, Posco runs a 1.5 million tonnes per annum (MTPA) plant in South Korea on this technology.
The country's largest steel maker SAIL and the world's third largest steel firm Posco have been in talks for the past few months for jointly setting up steel plants in the country.
Although the Steel Ministry has given a go-ahead for the joint venture and even the SAIL board has approved the project, there are some murmurs of dissent within the ministry.
A senior official, on condition of anonymity, said that SAIL could be a loser in the JV project as it is coming at a time when the steel PSU is going ahead with a massive Rs 70,000 crore expansion projects of its own. According to him, the project should have been debated much more widely before taking a final call.
The proposed 1.5-MTPA plant in Jharkhand using Posco's technology may come on a site that was originally meant for Bokaro Steel Plant's new melting shop. BSP is in the process of doubling its production capacity to 7.5 million tonnes by 2011-12 as part of SAIL's expansion programme.
The board sub-committee is understood to have recommended allocation of 500-acre of land at BSP. The new JV project is proposed to be operated on iron ore fines of SAIL which is largely unutilised.
