SAIL looks to ink JVs with Posco, Tata Steel and ArcelorMittal

Steel Authority of India (SAIL) is gearing up on its plans for joint ventures (JVs) with steel majors this year.

The company is entering into a JV with Korean giant Posco to build a 2 million tonne plant in Jharkhand, while it is also in talks for multiple ventures with Tata Steel, Arcelor Mittal group and Japanese steel companies like Kobe for greenfield ventures, S K Roongta, chairman, SAIL, said.

“With Posco we have expressed the willingness to set up a facility. Discussions are progressing and if the JV gets established, SAIL will have access to the latest technology. The detailed project report has not been prepared but it is likely to be a 2 million tonne plant initially, that will be set up in Jharkhand.” He also reaffirmed that SAIL won’t be partnering Posco for its Orissa venture.

“Tata Steel and ArcelorMittal have separately expressed joining hands with us and we are in the initial stages of discussions,” Roongta said. He declined to divulge any details on either of the projects saying that the strategy for JVs was part of the business development of the company. “It is not that we will go alone but every player sees great potential for steel manufacturing in the country. JVs will help us grow more than the demand growth of steel in the country”, he said.

Sources, however, hinted that the Tatas could set up a 2 million tonne steel unit with SAIL in Bokaro. On the other hand, ArcelorMittal, whose India plans have not made much headway could also set up a 3-4 million tonne in the eastern regions.

SAIL’S Chiria mines were being eyed by Arcelor sometime back. Speaking on raw material prices, Roongta said, “The cumulative impact of iron ore and coking coal prices is higher than what it was in 2008. We are continuously improving our cost parameters and I can say that the current cost of operation is much lower than in 2008. Currently, we import 12 million tonne of coking coal, which meets 75% of our needs”.

SAIL is also investing Rs 12,000 crore this fiscal for its ongoing projects and is expected to add new capacity by June 2012. It is adding 200,000 tonne of capacity at Salem, Tamil Nadu this year.
The company, which has set a production target of 60 million tonne by 2020, said it would not be difficult to achieve a production of 45-50 million tonne. This was in the context of the ever-growing problem of land allotment, which has been plaguing the progress of many projects.