Kobe Steel may set up plant in India

23 May 2007

Mumbai: Kobe Steel Ltd., Japan''s fourth-largest steel maker, is planning to build steel plant in India jointly with the Chowgule group. Alternatively, Kobe may also license its production technology to an Indian company.

Kobe Steel expects to start construction of thee plant by the year-end, using Kobe''s technology called the ITmk3 process.

The plant will employ a new technology that enables production of high-grade steel from cheap iron ore and coal. Kobe Steel is aiming at a 500,000 tonnes-a-year capacity, involving investment of around 20 billion yen ($165 million).

The plant will produce iron nuggets from iron ore fines and pulverized coal through Kobe Steel''s patented ITmk3 process. The nuggets can be used as a raw material in electric arc furnaces to make steel.

A Kobe Steel spokesman said the company was looking to market the technology and set up its first commercial plant. Kobe was in discussions with the Chowgule group and the nature of partnership could be technology transfer or a joint venture, he added.

Kobe, which is currently running a pilot plant in Minnesota to test the process, said US steel maker Steel Dynamics Inc. is likely to become its first licensee of the process shortly.

Kobe Steel has been talking with several US steel makers on building a commercial-scale plant using the technology. Demand for the technology is also strong in countries like Australia, Brazil and India where coal is abundant, its president Yasuo Inubushi said.

Kobe is Japan''s fourth-biggest steel maker after Nippon Steel Corp., JFE Holdings Inc. and Sumitomo Metal Industries Ltd.

If the plan goes through, Kobe Steel would be the fourth foreign steel maker to invest in India after Posco, Mittal Steel and Sinosteel.