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Ambarish Mukherjee

Holds talks with Jharkhand, Orissa; Company President coming in Nov

New Delhi , Oct. 23

After Posco and Mittal Steel, Chinese state-owned Sinosteel Corporation is exploring possibilities of getting into the Indian steel arena. The company plans to set up an integrated steel plant in India with an annual capacity of 3-5 million tonnes and is currently engaged in the spadework required for a project of this scale.

The company hopes to finalise the location and other ground details within the next two to three months and intends signing the initial memorandum of understanding (MoU) with the State Government concerned by February 2007.

However, unlike Posco and Mittal Steel, Sinosteel is not rigid on the issue of allotment of an iron ore mine as a precondition for setting up the plant.

In talks

The Managing Director of Sinosteel India Private Ltd, Mr Wang Hongsen, told Business Line that the company has already held discussions with the Jharkhand and Orissa governments and the company's President, Mr Tianwen Huang, would be visiting India in November for further deliberations. Sinosteel India is a wholly owned subsidiary of the Chinese company.

The company is also in talks with Indian private sector companies for a possible joint venture.

"We have received many proposals. After Mr Huang's visit, we hope to finalise our plans with regard to our Indian partners or whether we would go on our own. After that, we hope that a MoU could be signed by February next year," he said.

`No problem'

On the issue of allotment of iron ore mines, Mr Wang said: "Once you have the plant, iron ore is not a problem.

Either the Government would provide it or we can get it."

Sinosteel is one of the largest global traders in iron ore, steel and other steel making inputs and equipment. According to mining industry sources, the company is currently buying around 8-10 million tonnes of iron ore from India annually.

Investment

The amount of investments that may flow in for this plant would be finalised at a later stage after the location and scale is decided.

However, going by the thumb rule of Rs 2,500 crore to Rs 3,000 crore investment per million tonne of greenfield steel capacity, the investment required could be to the tune of Rs 10,000 crore or more, industry sources said.

Officials in the Ministry of Steel also confirmed that Sinosteel officials had met the Minister of State for Steel, Mr Akhilesh Das.

"The company is a large manufacturer for steel making equipment like blast furnace, coke oven batteries etc. Initially, they wanted to participate in the expansion plans of Steel Authority of India Ltd and Rashtriya Ispat Nigam Ltd. But we have not yet got any paper or proposal from the company about its manufacturing plans," Steel Ministry sources clarified.

In July 2005, Sinosteel Corporation had been permitted by the Foreign Investment Promotion Board to set up a wholly owned subsidiary in India with a foreign direct investment of Rs 4 crore to undertake cash-and-carry wholesale trading of metallurgical raw and processed materials, auxiliary materials, metallic and non-metallic and non-metallic mineral products, non- ferrous metal products and other items.

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