The Hindu Business Line : POSCO's plant to be constructed in 3 phases

KOREAN steel major Pohang Steel Company (POSCO) said on Sunday that POSCO-India's proposed 12 million tonnes per annum integrated steel plant near Paradip in Orissa will be constructed in three phases of four million tonnes per annum each.

The decision to complete the Rs 51,000-crore project was taken at a meeting held in Seoul where 15 members of the board of directors of POSCO gave their approval to several agendas including the POSCO-India project.

POSCO's board of directors comprises six standing directors and nine outside directors. "The approval by POSCO's board of directors is yet another milestone in the history of the POSCO-India project. It reflects their faith and commitment to India and takes us a step closer to realising our vision for Orissa and the global steel industry," the company said in an official release issued here.

The capacity of the POSCO-India plant in phase one will now be four mt per annum as against three mt per annum, originally mentioned in the memorandum of understanding signed with the Orissa Government on June 22 this year.

However, the total capacity of the fully-integrated steel plant will still remain at 12 mt per annum, the company said. The first phase of construction is expected to be completed by December 2010, six months later than the original mentioned date of June 2010. This delay will be due to the increase in capacity and equipment changes, the company said. The final completion of integrated steel works will be earlier than the original schedule. The investment for the first phase is approximately $3.7 billion (Rs 16,650 crore). Finex process, an innovative and next generation iron-making technology, indigenously developed by POSCO is given priority over blast furnace process, which will also be considered as an alternative for the India project.

Of the four mt to be produced in the first phase, 1.5 mt will be slab and 2.5 mt will be hotrolled steel, value-added products, as against three mt of slab originally mentioned in the MoU. These slab and hotrolled steel will be used for export as well as domestic use.

The site preparation for the steel plant and construction work for the proposed port at Jatadhari are scheduled to begin in April 2007. The construction of the plant will start in April 2008.

Since the signing of the MoU in June and the setting up of POSCO's Indian subsidiary in August this year, POSCO has made a capital investment of $51.3 million in the project. The application for prospecting licence for three areas was filed by POSCO-India on September 27. Additionally, proclamation of the Government land amounting to 3,556 acres was announced on November 23 and 4(1) notification of the private land for the steel plant is expected to be published soon.

The project is the largest foreign direct investment in India and is a significant part of the company's strategy to enhance its global competitiveness. By setting up the 12-mt per annum steel plant, POSCO-India is striving to become a global leader in steel production.

The company said that India will see significant benefits from the project such as creation of about 48,000 jobs in the region and about 4,67,000 man years of employment during the construction phase.