SAIL will provide the land and POSCO will put in the required investment and the technology for the plant

Disappointed with the tardy progress of its proposed venture in Orissa, South Korean steel giant POSCO is looking for new opportunities and has now teamed up with state-owned Steel Authority of India Ltd (SAIL) to set up a Rs15,000-crore steel plant in Jharkhand.

"SAIL and POSCO have entered into an in-principle agreement to set up a half-a-million tonne plant in Bokaro. The steel mill using POSCO's FINEX technology will initially attract an estimated investment of Rs15,000 crore," an official in the know of the development told PTI.

POSCO, the world's fourth-largest steel producer, is likely to hold 60% stake in the joint venture while the rest could be with SAIL. The plant's capacity could be increased to 3-4 million tonnes at a later stage.

"There will be no cash transaction in buying the equity. SAIL will provide the land and POSCO will put in the required investment and the technology for the plant to manufacture steel which will be further taken by SAIL for making special products like auto-grade steel," the official said.

The POSCO team, led by its chief executive Chung Jun-Yang, attended a dinner with the top brass of SAIL and the steel ministry on Monday where the deal was formalised.

Thereafter, the POSCO team went for a tour of the plant site in Bokaro on Tuesday. POSCO officials have visited Bokaro earlier too, the official said.

When contacted, POSCO India's general manager for external relations, Simanta Mohanty confirmed the development, but said that details for the same are still awaited.

The government official added, "POSCO is keen on a joint venture plant with SAIL in Bokaro. The FINEX technology uses iron ore fines and low quality coal to produce high grade steel, which could be further processed by SAIL to make specialised steel."

When contacted, Jharkhand mines and industries secretary NN Sinha, however, said both SAIL and POSCO officials have not contacted the state government in this regard as yet.

POSCO's Rs54,000-crore plant in Orissa has failed to take off for the past four years mainly due to problems in acquiring land.

Meanwhile, POSCO had been looking for opportunities in states like Jharkhand, Karnataka and Maharashtra.

Steel minister Virbhadra Singh had in January said that SAIL is keen on setting up a new plant in Bokaro in a joint venture format with a global player. SAIL already runs a 4.5 million tonne per annum (MTPA) plant which it is expanding to 7.5MTPA as part of its Rs70,000 crore expansion programme.

POSCO and SAIL are already in a pact for supply of technology and technical knowhow.