After battling a delay of ten years in setting up its proposed project in Odisha, South Korean steel firm Pohang Steel Company (Posco) on Tuesday joined hands with the Uttam Galva group to set up a 3 million tonne (MT) per annum integrated steel plant in Maharashtra at an envisaged investment of nearly Rs 20,000 crore.
The Korean firm signed a memorandum of agreement with Uttam Steel and Power Limited (USPL), which is jointly promoted by the Uttam Galva group of the Miglani family and the world’s biggest steel maker ArcelorMittal to set up the integrated steel plant. The proposed project at Satarda in Maharashtra’s Sindhudurg district is expected to fructify soon as the Uttam Galva group has 2,000 acres of land in possession. It will initially build 1.5 MT per annum plant and after 2-3 years, its capacity would be upped to 3 MT annually.
“To begin with USPL would have 80 per cent equity in the proposed project and the remaining 20 per cent would be with Posco. The Korean firm would have an option to increase its equity as the project progresses,” Uttam Galva group deputy managing director Ankit Miglani told The Indian Express over telephone. Posco India general manager IG Lee said that the firm was in talks with Uttam Galva for sometime in this regard. A senior steel ministry official said such projects would act as force-multipliers for the government’s ‘Make in India’ programme. He said even the ministry is pressing the state-run steel and mining firms to for special purpose vehicles to execute steel projects entailing huge investments
The key factor in choosing Sindhudurg as the project site was because of its proximity to Goa, which has huge iron ore reserves. “While we can easily source iron ore from the neighbouring state, the Goa port is barely 80 kms away from the site,” Miglani reasoned. The proposed project which would entail an investment of about Rs 20,000 crore would be funded through a debt-equity ratio of 2:1, he pointed out. “Importantly for the steel industry, Posco would be bringing its patented Finex technology for the first time into India through this project. This technology enables utilisation of inferior grade iron ore and reduces dependence on high grade iron ore,” Miglani said.
This is the second major manufacturing facility announced in Maharashtra within a week, after Taiwan’s contract electronics manufacturer Foxconn last Saturday announced a $5 billion investment for a plant in the state. Miglani said Maharashtra emerged as the natural choice as both Uttam Galva and Posco have operating plants in the state. “Our group has two operating steel projects at Khopoli and Wardha in Maharashtra and the state government is generally helpful in ironing out the bottlenecks,” Miglani said.
Maharashtra is also not a new destination for Posco as the Korean firm has a steel processing unit of 2 MT per annum capacity in Vile-Bhagad Industrial Area near the Mumbai port.
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