SAIL and South Korean steel giant Posco are inching closer towards a joint venture agreement for the proposed three million tonne project at Bokaro that entails an investment of Rs 17,000 crore.

SAIL Chairman, Mr C. S. Verma and Posco's India head Mr Yong Won Yoon held discussions with Steel Secretary, Mr P.K. Mishra on issues relating to the shareholding and iron ore supplies on Monday.

“It was a courtesy meeting and the talks are progressing well,” said Mr Verma, without divulging specifics. “When we are going to invest between $4-5 billion, we would like to have a proper understanding with our partner before finalising the proposal,” he said. However, the SAIL chairman refused to comment on the time-line for the proposed joint venture agreement, but said “we are quite close to coming to a final understanding”.

Majority stake

Reported differences over who would hold majority stake in the proposed venture has delayed project take-off for which the memorandum of understanding was signed last year. SAIL was keen on having a majority stake of 51 per cent in the proposed venture to retain its public sector character. However, Posco, which is taking its Finex technology outside South Korea for the first time, wanted a majority stake besides retaining the operational control of the venture. Besides, both companies had faced issues on the pricing of iron ore that SAIL would supply from its captive mine to the proposed venture.

Two units of 1.5 million tonne each are proposed to be set up in Bokaro to produce auto grade steel using Posco's patented Finex technology. The Finex technology is considered environment friendly and makes use of iron ore fines, thereby eliminating the need to use coking coal in the steel making process.

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