SAIL, Posco closer to agreement on joint venture

Steel Authority of India Ltd (SAIL) and South Korean steel maker Posco have finalised almost all issues, except the shareholding structure, of their proposed joint venture for producing auto-grade steel.

State-run SAIL and Posco have proposed to invest around Rs16,000 crore in a joint venture plant at Bokaro that would produce 3 million tones of auto-grade steel a year.

''All issues have been frozen already and it is only the equity participation for which we are having a very positive and constructive dialogue,'' said SAIL chairman C S Verma.

However, shareholding in the proposed venture remained a vexed issue for the two with either seeking controlling rights.

Posco wants management control of the joint venture with 51 per cent stake while SAIL is agreeable to a 50:50 split of the capital.

SAIL, however, is hopeful of resolving all issues over the JV, which will use Posco's patented direct reduction Finex technology, an environment-friendly iron-making process.

''We are having talks on a very positive path. It should happen in due course,'' he said.