Companies

SAIL to ink pact with Kobe Steel today

Jayanta Mallick Kolkata | Updated on March 12, 2018 Published on July 09, 2012

The agreement is for Rs 1,500 crore and 0.5 million tonne a year iron nugget plant at Durgapur in West Bengal.

SAIL and Kobe Steel of Japan is set to formally ink a 50:50 joint venture agreement on Tuesday in Tokyo for Rs 1,500 crore and 0.5 million tonne a year iron nugget plant at Durgapur in West Bengal. This is happening after more than two years of preparatory exercises.

Both had signed an MoU on March 30, 2010, for a joint feasibility study for commercialisation of a proprietary technology of Kobe. The companies are understood to have prepared a detailed project report. This is significant in the backdrop of a Kobe’s setback in North America. Its partner NYSE-listed Cliffs Natural Resources Inc in Michigan-located iron nuggets project after five years decided to dissolve the joint venture in February.

According to SAIL sources, the project would be based on a new technology developed by Kobe, which can use accumulated fines at the Gua mines in Jharkhand into nuggets with 95-96 per cent iron content.

The project would be set up at the Alloy Steel Plant of SAIL on its 120 acres.

According to the terms, 10 per cent of the produce would be used by ASP’s electric arc furnace as an alternative to currently costlier scrap.

Kobe would buy up a portion of the nuggets and SAIL's steel plants also likely to use nuggets in converters.

“To produce one tonne of nuggets, the project would need 1.5 tonnes of fines and 0.5 tonne of non-coking coal. The project will have a pellet plant and rotary hearth furnace,” a steel making expert told Business Line .

According to Kobe, plant construction would commence next year at the earliest and the plant would go into operation in 2015.

The joint venture company — SAIL-Kobe Iron India Pvt Ltd -- has already been incorporated.

Published on July 09, 2012
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