Posco, Arcelor seek to tango with SAIL: reports

L N Mittal-led steel major ArcelorMittal has proposed setting up of an integrated steel plant on joint venture basis with Steel Authority of India (SAIL) near the latter's Bokaro facility in Jharkhand, The Economic Times reported today.

According to an unidentified government official quited by the paper, Arcelor Mittal has proposed a 50:50 joint venture to set up a 3-4 million tonne steel plant with SAIL at an investment of around Rs12,000 crore, adding the proposal would be considered on merit prior to a decision being taken.

The company's proposal follows Korean steel maker Posco's offer to SAIL to form a JV company for the same steel project. Posco is also considering joining hands with the PSU due to the failure of its steel project in Orissa to start due to problems of land acquisition and obtaining a mining lease, the ET report said.

Analysts say if the deal were to work out it would give ArcelorMittal a strong foothold in the country's growing steel sector. The company's proposed steel projects in Orissa and Jharkhand are suffering delays over land acquisition problems. Also the company's proposal for a plant in Karnataka is in initial stages of getting clearances.

Meanwhile, SAIL has decided to partner with a global steel major to gain access to the latest technology in steel making for making certain special grades of steel currently imported in the country.

Its Bokaro steel plant has surplus 15,000 acres of land that could be utilised by the proposed joint venture company for development of parallel operations. Partnership with SAIL would provide the joint venture land and necessary infrastructure facilities as also raw material linkages the report said.