Posco plans to build a steel plant in India

South Korea's leading steelmaker Posco and state-owned Indian giant SAIL are in talks to create an integrated steel company. Two projects are being discussed, one of which involves the construction of a steel plant in Jharkhand, the second concerns a metallurgical plant in Odisha that has stalled for ten years.

Deadlocked with the Odisha project due to regulatory hurdles, including delays in land acquisition, Posco is exploring other investment opportunities in India. Posco and SAIL have recently been negotiating a joint plant in Jharkhand with an annual production capacity of 3 million tonnes. Kwon Oh Jun, CEO of the world's fourth largest steel company, met with Prime Minister Modi and is believed to have discussed new investment plans.

Earlier negotiations between SAIL and Posco for the construction of a metallurgical plant in Bokaro failed due to disagreements over ownership. Posco demanded a controlling stake. As a result, the agreement between the companies did not take place. Posco entered into an agreement with the Odisha government on June 22, 2005 to establish the plant. However, Posco took another hit earlier this year when news came that the company needed to participate in the auction to get an iron ore mine diverted to supply raw materials for a future steel mill, rather than directly mining the mine.

Although the company signed a memorandum of understanding with the Odisha state government to guarantee the allocation of mining leases, the introduced bill mandates the allocation of all mines only through an auction process, and the agreement with the government now plays no role.