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The Steel Ministry on Tuesday said Posco and Severstal cannot have majority stakes in their proposed joint ventures with state-run SAIL and NMDC respectively, envisaging a total investment of Rs 36,000 crore.
“Talks are going on. There are problems in regards to the shareholding. But, we can’t give them land, we can’t give them all facilities, and still have the minority shareholdings in the ventures,” Steel Minister Beni Prasad Verma told PTI.
He declined to give a time-line as to when the deals are likely to be sealed.
“These can be finalised only when Posco and Severstal agree to give our companies 51 per cent stakes in both the joint ventures,” he said.
SAIL had signed a memorandum of understanding (MoU) with South Korea’s Posco to form a joint venture company at Bokaro in Jharkhand for setting up a three-million tonne per annum steel-making unit last year with a Rs 16,000 crore investment.
NMDC had inked a MoU with Russia’s second largest steel maker Severstal in late 2010 for a three mtpa plant initially in Karnataka involving around Rs 20,000 crore investment.
Differences on shareholding issue continue to come in the way of formation of the two steel-making ventures, as both the foreign firms are insisting on owning majority stakes in them.
While in the case of SAIL-Posco venture, Posco will bring in iron-making technology that is not in use anywhere other than in its own domestic plant, Severstal would only supply coal, the raw material for steel-making, for the plant, if the deals with NMDC come through.
When asked whether the proposed joint ventures to see the light of the day, Verma said, “It is their decision, you have to ask them. Talks are going on. If tomorrow they say, “yes”, to our demand, we will go ahead“.
Verma said talks can progress further when there is equal eagerness, even if the MoUs expire.
“MoUs can be extended even if the matter is not finalised within the stipulated tenure of the MoU, if both parties find there is a possibility,” he added.
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