Visakhapatnam: Union Minister for Steel Dharmendra Pradhan on Wednesday announced that the South Korean steel giant `POSCO' has signed a Memorandum of Understanding (MoU) with Rashtriya Ispat Nigam Limited (RINL) in October 2019.
In a reply to Rajya Sabha member V Vijaysai Reddy's question on Wednesday, the minister said a non-binding MoU has been signed in October 2019 between RINL and POSCO. "Pursuant to the MoU, a joint working group was formed for the exchange of information. The shareholding pattern has not been determined at this stage. However, as per the MoU, POSCO wished to have at least 50 percent shareholding while the shareholding of RINL would be worked on the basis of valuation of RINL's kind contribution of the land for setting up of the plant," he said.
The POSCO now may probably skip the Kadapa venture and the second steel plant it proposed on the vacant steel plant site for which it signed an MoU with the RINL in 2019.
Several changes in the POSCO plans would be seen in the next few months after the cabinet committee on economic affairs announced strategic sale of RINL, the flagship company of the Visakhapatnam Steel Plant recently.
Initially on the request of the AP government, the Korean company evinced interest in developing a greenfield steel plant with 5 million tonnes per annum capacity in Kadapa. Chief Minister YS Jagan Mohan Reddy laid the foundation stone for the plant in Sunnapurallpalli village in Jammalamadugu Mandal in Kadapa district on December 23, 2019, and the government signed an MoU with NMDC for the supply of ore.
"The state government is still looking for investors after POSCO did not show much interest. Now only land acquisition process is going on," a source from Kadapa said.
"When the company is getting 22,000 acres of land and India's only shore-based steel plant on a platter why it will go all the way to Kadapa or build a new plant in the RINL premises,'' said Ch Narsinga Rao, state president of CITU.
He said the state has been waiting eagerly to know who could be the final bidder for the RINL.
"If it succeeds in taking over RINL, the Korean steelmaker will become a market leader. It shall have access to the South East Asian markets besides catering to the domestic needs of special steel through rail and road," Rao said
This is the second time POSCO is making a bid to build a steel plant in India. In 2005, it signed an MoU with the Odisha government but had to abandon it due to delay in getting pollution control board approvals and stiff opposition from the local people. The MoU expired in 2010.