A joint working group of state-owned Rashtriya Ispat Nigam Ltd. (RINL) and South Korea's POSCO has been formed to prepare a pre-feasibility report with respect to their plans to set up a greenfield steel plant in Andhra Pradesh, according to a government source.
The development follows a virtual meeting held between POSCO representatives and steel ministry officials in July 2020. In the meeting, the Korean steel giant was asked by the ministry to form a joint working group (JWG) to facilitate the implementation of the memorandum of understanding (MoU) signed between POSCO and RINL regarding investment on the land owned by the state-owned firm in Visakhapatnam, Andhra Pradesh.
"POSCO has evinced interest to set up a plant in Visakhapatnam. A joint working group has been formed for preparation of pre-feasibility report," according to the source in the Ministry of Steel. The JWG includes officials of both the companies, the source said adding the group would update the Ministry of Steel about the progress of the work.
The JWG would meet regularly to expedite the implementation of the MoU signed between the two players last year. POSCO and RINL have been in talks for quite some time over their plans to set up a joint venture (JV) for manufacturing value-added special grade of steel. Setting up of a plant in JV with RINL will give POSCO a foothold in the growing Indian steel industry. POSCO's interest in India is not new.
The player had been trying to enter the Indian market for about 15 years. Earlier, the company had proposed to set up a 12 MTPA plant at Jagatsinghpur in Odisha at an estimated cost of Rs 52,000 crore. In this regard, an MoU was also signed between POSCO and the Odisha government in 2005 but the plant could never be set up due to various reasons from delay in environmental clearances to protests by locals, and the pact ultimately expired in 2010 and was not renewed again. RINL's 7.3 million tonnes plant in Visakhapatnam is a shore-based integrated steel plant.
It has a land of over approximately 22,000 acres of its own and enjoys access to Gangavaram Port, where raw materials such as coking coal etc arrive. Since RINL is located on the eastern coast of India, a JV plant will give access to the South East Asian markets besides catering to the domestic needs of special steel through rail and road.
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