South Korean steel major Posco, which has so far failed to make headway in its proposed port-based steel plant near Paradip, now plans to set up another plant of 6-lakh-tonne capacity in Odisha.
Sources on Thursday said the Posco has already signed a memorandum of understanding (MoU) with the Indian company Mesco. The new plant would be built within the premises of the Mesco Steel’s Kalinganagar unit using the Finex steelmaking technology.
The Posco would be dismantling and shifting its 6-lakh-tonne steel unit, which uses the Finex process for producing steel, from South Korea to Odisha, the sources informed.
The Posco holds the patent for the Finex process, which produces high-quality steel using low grade iron ore and doesn’t even require coking coal for production. The unit which would be shifted to Odisha was the Posco’s pilot unit using such technology in South Korea.
Earlier, the Posco had held negotiations with the Steel Authority of India (SAIl) for setting up the plant in the latter’s Bokaro unit. However, a final agreement was never reached.
The Posco, which was looking for a partner in India, has ended up signing an MoU with the Mesco in this regard.
The new unit would augment the Mesco’s production capacity, which is 12 lakh tonnes at the moment. However, the shareholding pattern of the two companies in the deal is presently not known.
With the Posco’s Paradip unit getting delayed, the steel behemoth has found out a new route to start its production in Odisha, say industry watchers.